SENIOR SIGNALS: Common errors in long-term care planning

Published on Sunday, 13 September 2020 20:37
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Our law firm assists seniors, disabled persons and their family members in applying for Medicaid assistance. We frequently observe the following planning errors that people make when applying for Medicaid.

Medicaid myths

Relying on information from family members, friends or non-Elder Law professionals. Medicaid is a state program funded in part by the federal government. Each state has its own Medicaid rules and regulations. Seniors, disabled persons and their families should consult with an experienced elder law attorney familiar with the Medicaid program in the state in which the Medicaid application is to be filed.

Thinking it’s too late to plan

It is never too late to plan. It is possible to begin planning even after the senior or disabled person enters a nursing home. With proper planning, it is possible to save much of the senior or disabled person’s assets.

Giving away assets too early

These assets belong to the senior or disabled person - don’t put the senior or disabled person at risk by making premature gifts to family members.

Premature gifts can also result in tax and Medicaid problems. It can also be a problem if assets are given away without proper documentation. Even innocent gifts can create problems for seniors under the law, “Deficit Reduction Act (DRA).”

Ignoring important safe harbors created by Congress

Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and into trust for anyone who is disabled and under age 65.

Failing to take advantage of protection for the spouse of a nursing home resident

These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance and in some instances petitioning for increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application (spousal refusal).

Applying for Medicaid too early

In some cases, applying for Medicaid within five years of making a gift can result in a longer period of ineligibility.

Applying for Medicaid too late

Applying for Medicaid too late can result in spending funds that could have been protected by proper planning. Why pay a dollar more than you have to?

Failing to keep good records

An experienced Medicaid eligibility worker will examine and audit all Medicaid applications. The applicant should retain records to support all items listed on the application, document the applicant’s assets as of the date of entry into the nursing home and verify the disposition of the applicant’s assets for the five years prior to the filing of the application.

Failing to do planning for the healthy spouse after the ill spouse is on Medicaid

Many people are confused about the differences between Medicaid liens on your property and estate recovery.

There are a number of exceptions that exist where healthy spouses can protect themselves, their assets and their families after a spouse is granted Medicaid benefits.

Not getting expert help

Medicaid asset protection planning is complicated. Most people will require this planning only once during their lives. A great deal is at stake and it is unwise not to consult an experienced elder law attorney when nursing home care is necessary. The attorney’s fees are an investment, not an expense.

Attorney Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol. (860) 583-1341 or

Posted in New Britain Herald, General News on Sunday, 13 September 2020 20:37. Updated: Sunday, 13 September 2020 20:40.