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.