Medicaid Planning
Medicaid planning is long term care planning while protecting assets. There two types of Medicaid planning:
1) crisis Medicaid planning, and
2) Medicaid pre-planning .
The difference between the two is timing.
Crisis Medicaid planning is used when someone needs Medicaid benefits due to a sudden illness or medical emergency. Medicaid pre-planning involves long term care planning when Medicaid benefits may be needed in the future. Both involve the protection of assets like your home, car, and retirement.
The Medicaid five-year look-back period can be a gotcha to someone attempting Medicaid planning without knowledgeable assistance. The Medicaid Five-Year Lookback Period is a rule that requires Medicaid applicants to disclose all financial transactions, gifts, and asset transfers made within the five years (60 months) before applying for long-term care Medicaid.
Examples of violations include:
Gifting assets: Giving cash, property, or other assets to family members or others.
- Transferring assets: Moving ownership of a home, car, or other valuable assets to someone else.
- Selling assets below market value: Selling property, collectibles, or other assets for less than their fair market value.
- Making informal caregiver payments: Paying a caregiver without a formal agreement.
- Charitable donations: Donating cash or assets to charities.
- Paying for someone else’s expenses: Paying for someone else’s education, rent, mortgage, insurance, or medical bills.
- Irrevocable trust transfers: Placing assets into an irrevocable trust during the look-back period.