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Mistakes in Medicaid Planning

Planning at least five years before you need assistance is optimal, and all your assets can be protected. Here are some mistakes we want to see you avoid making during the Medicaid application process:

• Mistake No. 1: Failure to provide a valid, Durable Power of Attorney that gives the necessary power to the agent to help the applicant in the process. This is where DIY forms are a very bad idea. • Mistake No. 2: Failure to draft and fund an irrevocable trust 5 years before benefits are needed. • Mistake No. 3: Selling the primary home, thereby converting an uncountable asset to a countable one and thereby disqualifying the Medicaid applicant.

• Mistake No. 4: Making gifts within five years before applying for Medicaid creates a waiting period that could delay qualification entirely if the gifts are sufficiently large. • Mistake No. 5: Co-signing with children or grandchildren on notes to allow those without sufficient credit to purchase their homes, creating a disqualifying asset under Medicaid rules. • Mistake No. 7: Not understanding the use of a qualified income trust (QIT), also known as a Miller Trust, to qualify an applicant whose income is over the amount allowed for qualification for Medicaid. • Mistake No. 8: Couples spending needlessly to the $3,000 asset level without taking advantage of the spousal impoverishment and other applicable rules for additional retention of assets allowed for the stay-at-home spouse. • Mistake No. 9: Failure to avoid probate of noncountable assets by not using such tools as a Ladybird Deed to take the homestead out of the estate since Medicaid can recover what it paid out in benefits only from estate assets.

• Mistake No. 10: Failure to apply for Medicaid while in a skilled nursing facility for at least 60 days. You bypass the Medicaid waitlist if you apply during your short-term nursing/rehab facility stay.

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