Do It Yourself Medicaid Planning

Medicaid planning is complex and the rules are constantly changing. Something that worked for your neighbor may or may not work for you. You need to talk to an experienced elder law attorney. Here's why.

-- By K. Gabriel Heiser, Attorney

Clients sometimes come to me having already done some home-brew Medicaid planning, probably because they got some tips from their neighbor or simply were afraid of the perceived high cost of lawyers. However, this is one area where you definitely do not want to do-it-yourself!


First, the facts of your neighbor's situation are surely different from yours, in ways you may not realize even matter. For example, the income of your neighbor's parent, cost of the nursing home in question, his parent's health and life expectancy, may all differ from that of your situation. Yet each of these factors will most likely change what is advisable to do or suggest alternative approaches to an experienced elder law attorney who regularly advises about Medicaid issues.


Second, the laws change frequently. So even if your situation were exactly the same as that of your neighbor, the rules of the game may have changed in the months or years since your neighbor's advice made sense. For example, when Congress passed the Deficit Reduction Act of 2005 on February 8, 2006, the "lookback period" (which penalized gifts that were made a certain number of months before a Medicaid application) was extended from 36 to 60 months. Applying even one month too soon, following a large gift, could have disastrous financial consequences. It pays to know the rules!


Third, your family situation may differ from your neighbor's in ways he may not be aware of, and even if he were aware of, he may not realize the importance of such a situation: there may be safe-harbors and exclusions that apply to your particular family situation that your neighbor may not have heard of. For example, you may have a sibling who is "disabled" as defined by the Social Security Administration: one exception to the general rule that making a gift causes a period of disqualification from Medicaid benefits, is making that gift to a trust for the benefit of a disabled child (of any age).


Fourth, most people don't realize the major differences from state to state in many of the Medicaid rules. Although the basic framework for the entire Medicaid program is set by the federal government, with many of the rules required to be the same in every state, there are also many sections of the Medicaid law that allow each state to set its own rules, within certain limits. So what may have worked for your neighbor's mother in Florida won't fly in Colorado.


Fifth, the "imaginative" asset shifting technique your neighbor's mother utilized may indeed have "worked"---that one time, with that one caseworker. That is certainly no guarantee that your parent will be so lucky with the same technique. You may not want to risk the consequences of such a technique failing; your attorney can help you assess the risks and together you can make an informed decision.


As you can see, this is an area fraught with complications. Asking your neighbor's advice about the best computer or car to buy is one thing, but you proceed at your own peril if you rely on the neighbor for Medicaid planning!


K. Gabriel Heiser is an attorney with over 25 years experience in elder law and estate planning. Heiser is the author of “How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets,” an annually updated practical guide for the layperson. For more information about this book, visit Medicaid Secrets. We feel similarly about do-it-yourself living trusts.


New! Comments

Leave a comment about this article in the box below and share it with your Facebook friends.

Have a Medicaid Question or Comment?

We'd love to hear your questions, comments or opinions. Submit them here and other visitors can read them and comment on them. An e-mail address is not required.


The purpose of this feature is to stimulate discussion and share experiences regarding topics of interest. However, please note these submissions are not reviewed for legal accuracy. They may not apply to your situation and should not be considered legal advice. For specific legal advice you must consult with your attorney.




Medicaid Planning: Life Estate in House | Does the $13,000 Gift Tax Exemption apply to Medicaid? | Medicaid and Community Spouse Assets | Planning For Medicaid Coverage | Effect of Life Insurance Proceeds On Medicaid Eligibility | New Medicaid Annuity Rule Explained | How Can an Irrevocable Trust Be Used in Medicaid Planning? | Selling the House and Medicaid Qualification | How To Qualify For Medicaid If My House Is Worth More Than $500,000? | What is Elder Law? | Living Trust and Medicaid | What Is An Inheritor's Trust? | Should I Take Out a Loan Against My House to Pay For A Nursing Home? | Can I Give My House to My Child and Qualify for Medicaid? | Elder Care Lawyer Fees | Choosing A Nursing Home | Do I Need a Will? | Capacity To Sign a Will, Trust or Power of Attorney | Second Marriage Will Issues | Special Needs Trust Issues | What is a Common Law Marriage? | What is a Medicaid Annuity? | How does a Medicaid Annuity Work? | How To Protect My Home and Still Qualify for Medicaid? | Medicaid and Spousal Will Election | Medicaid Rules and Reverse Mortgages | How Does Life Insurance Policy Ownership Affect Medicaid Eligibility? | Medicaid Estate Recovery Rules | Medicaid Estate Recovery Planning | Limitations on Medicaid Estate Recovery | Do Medicaid Plans Work? | Nursing Home Costs and Payment Options | Don't Be Too Cheap! | What Happens to My Home If I Go On Medicaid? | Can Spouse Receiving Medicaid Pay Income to Community Spouse? | Will Medicaid Exempt My Home If I Leave It? | Tips for Discussing Wills and Powers of Attorney With Your Parents | Elderly Marriage Issues | Durable Power of Attorney Medicaid Considerations |


From Do It Yourself Medicaid Planning to Medicaid Questions | Estate Planning Blog | Basics of Estate Planning | Selecting a Financial Planner | Estate Planning and Taxes | Is This Good Time to Buy a House? | Incorporate My Business | Best Low Cost Investment | Fringe Benefit Plans | Estate Planning and Charitable Giving | Health Insurance Comparisons | Best Medicare Supplement Plan | Retirement and Estate Planning | What is a Power of Attorney? | Current Estate Planning News | Estate Planning Forum | Estate Planning Books | Choosing an Estate Planning Attorney | Find a Probate Attorney | Estate Planning Questions |


Return to Home Page

About Us | Contact Us | Site Search | Terms of Use / Privacy Policy


Subscribe to
Estate Planning Hub


Your First Name


Your E-mail Address

We keep this private.



Follow the Estate Planning Blog.




--by Beth Heikkinen
Marquette, Michigan
I just want to thank you for this site. It answered my questions. I think many people that do research on the net take it for granted and when they find what they are looking for they forget "someone put time, money, etc into providing me with this information."

Thank you!


Like This Site





Visit Our Social Media Pages

Become a Fan of Estate Planning Hub on Facebook Follow EstatePlanningHub on Twitter Follow EstatePlanningHub on Google+ Subscribe EstatePlanningHub Video on YouTube

Get a PDF version of this website and its sister site here.