There are numerous myths and misconceptions about Medicaid that result in misinformation and oftentimes poor financial decisions. In order to make the best decisions for you or a loved one, you need to understand the Medicaid rules and how they apply to your situation. Below are a few Medicaid myths that you should be aware of.
- I basically have to give away everything I own to qualify for Medicaid.
Medicaid has very strict asset requirements and for many seniors spending down their estate can be difficult. However, it is important to make the distinction between exempt and non-exempt assets in Medicaid planning. For example, a car, primary home, irrevocable funeral contract and $2,000 in cash assets are exempt assets for a single person. The rules for a married couple are even more complicated. Rest assured, exempt assets and other estate planning strategies can allow seniors to qualify for Medicaid without getting rid of everything.
- If I give anything away I won’t be eligible for benefits.
This is a complicated myth. The state of Michigan does consider gifts made in the 5 years prior to filing for Medicaid benefits to be subject to a penalty from Medicaid eligibility. However, there are exceptions to the gifting rules and strategies that can be used to legally divest assets. You should meet with a qualified elder law attorney to discuss your options.
- Our pre-nuptial agreement shows that everything I own belongs only to me.
The state does not consider pre-nuptial agreements when determining Medicaid eligibility. All marital assets are considered under the Medicaid rules and must be divided and spent down as if no pre-nuptial was in place. Proper planning can however protect assets for the non-nursing home spouse.