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  • Writer's pictureBrian A. Raphan, Esq.

The Top 8 Medicaid Planning Mistakes


Avoiding these mistakes can save you thousands of dollars and help plan for the future of your family.

1. Thinking it’s too late to plan. It’s almost never too late to take planning steps, even after a senior has moved to a nursing home. 2. Giving away assets too early. First, it’s your money (or your house, or both). Make sure you take care of yourself first. Don’t put your security at risk by putting it in the hands of your children. Precipitous transfers can cause difficult tax and Medicaid problems as well. 3. Ignoring important safe harbours 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 ; a transfer to a “pay-back” trust if under age 65 ; and a transfer to a pooled disability trust at any age. 4. Failing to take advantage of protections 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 an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application. 5. Applying for Medicaid too early. This can result in a longer ineligibility period in some instances and can cost you thousands of dollars. 6. Applying for Medicaid too late. This can mean the loss of many months of eligibility and deplete your assets and life savings that you may have wanted for your spouse or family. 7. Confusion about the difference between lifetime liens on property and estate recovery. There are a number of exceptions to lifetime liens on property, but for estate recovery there is only a deferral for a surviving spouse and a hardship waiver.

8. Not getting expert help. This is a complicated field that most people deal with only once in their lives. Tens and even hundreds of thousands of dollars of your money is at stake. As with any important decision in life, be well informed. Consulting an Elder Law Attorney is important, but make sure they have experience and expertise in this practice area. If you are already a client or thinking of becoming one of our many satisfied clients give us a call for an appointment or more information. Each state has different rules. The cost to plan properly and accurately is relatively low compared to the savings you can achieve. You can learn about your best options with a free consultation. We have been helping families in this practice area for over 25 years.

Questions? Call 212-268-8200 or email


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