Well-intentioned people often make well-intentioned mistakes.
This axiom is especially true when dealing with an elderly family member’s finances and legal matters. You have all heard the expression “a little knowledge is a dangerous thing”… this is certainly true when listening to your neighbor or your brother-in-law speak about Medicaid eligibility and spend down allowances.
Not going to a professional is one of the most costly mistakes one can make. With the cost of nursing homes skyrocketing to as much as $14,000 a month, professional guidance is worth its weight in gold.
An eldercare attorney recently told me that five years ago his practice primarily consisted of assisting families plan for Medicaid and making sure they had the proper medical power of attorney, living wills, trusts and wills prepared. Now, he spends most of this time trying to undo mistakes that people unwittingly made.
One common mistake is divestiture of assets. There is a big difference between gifting to your children and grandchildren under the IRS guidelines, and the gifting regulations under Medicaid.
Medicaid views these gifts differently. If any transfer of assets or gifts occurs within five years of applying for Medicaid, those monies are subject to a penalty. Medicaid doesn’t care that the money was used for college tuition or to help a family member purchase a home. If the money came out, it must be returned, even if it’s not readily available.
To learn more about some common mistakes and how to avoid them, please read Eight Common Mistakes Families Make As A Loved One Ages, written by Eric Goldberg, Esq., and Medicaid Pittfalls, written by Harold Grodberg, Esq.
One more piece of advice: now that you understand the importance of seeking legal assistance, make sure you go to an elder-law specialist. Elder-law is a dedicated field of study and it is important to seek the assistance of an attorney whose practice is devoted to this specialization.
~ Candy Blau, MA