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Medicaid Benefits – Things To Do & Not Do When Applying For Benefits

Updated: Jun 30, 2023

We often receive calls from potential calls in a panic because they need to undo something they did that they thought would help them or a relative get Medicaid benefits, such as re-titling the home of the Medicaid applicant or transferring all their money to a grandchild. These methods do not work to get your Medicaid benefits approved.


It’s essential to keep good financial records. The Agency handling Medicaid benefits reviews several years of financial records. So, keep all your bank statements, IRA statements, etc. for at least the past five years.


Do not change the title on any property without first consulting a lawyer who understands Medicaid laws. Frequently, people will engage in self-help planning and have a home transferred for $1 to an adult child or possibly give away money outright to another person. All of these types of transactions are scrutinized by the Medicaid Agency during the review process and inadequate/erroneous planning can cause disqualification of Medicaid benefits.

Be sure to document payments to a caregiver. For instance, a caregiver child should have a written contract for caregiver services with a parent and also prove that the payments made to the child were properly reported for income tax purposes by the caregiver-child. If these formalities are not met, the Medicaid Agency may take the position that each caregiver payment to the adult child was a gift that is subject to a transfer penalty and which may delay Medicaid eligibility for the parent.


When we have to do Medicaid planning for a client on behalf of their parent that no longer has legal capacity, it is imperative that they have a Durable Power of Attorney. Without a proper POA, we may be unable to execute a proper plan and guardianship may be necessary. While there are many “boilerplate” forms out there, caution should be taken in simply using an old form when the laws may have changed which now requires more specialized knowledge about the anticipated needs of an incapacitated individual. Therefore, it is important not only to execute a Power of Attorney before it is needed but also to get the right kind of Power of Attorney to maximize the options both now and in the future. This would also be the right time to sign a Healthcare Power of Attorney to appoint someone to make healthcare decisions for you if you are unable to do so.


The cost of care at home or at a facility is likely over $4,000 a month now. Please don’t wait to plan for Medicaid benefits when you need to apply. Preplanning will not only save you thousands, but it will protect your hard-earned savings too.


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