If you’re like 43% of Americans over the age of 65, you will at some point in your life need to pay for an extended care facility or nursing home stay. Paying for this expense is often quite difficult for many people, unless they qualify for Medicaid. There are several misunderstandings and popular myths about what it takes to qualify for the Medicaid program, so let’s look at three of these and clear them up.
Myth 1: I can give my children estate gifts and qualify for Medicaid.
While a good estate plan will allow you to give your property to your children without being subject to gift taxes, that doesn’t necessarily mean you will still be able to qualify for Medicaid. A Medicaid plan requires that you do not exceed certain specified qualification limits. One of the limits requires you to have given no gifts within the past five years that would exceed the asset limitations. Even if your gifts qualify as tax exempt estate gifts, you can still be ineligible for Medicaid.
Myth 2: I’ll have to sell my home to qualify for Medicaid.
Medicaid allows you to keep your home, as well as a personal vehicle, your personal property, and up to $2,000 in other assets and still qualify for the program. It also gives your spouse the right to claim an additional amount of assets if you need to enter assisted-living and your spouse does not. Either way, you will not have to sell your home to qualify for Medicaid.
Myth 3: I can keep joint assets with others and still qualify.
As long as you have an ownership interest in an asset, this will count when you’re considered for Medicaid eligibility. However, Medicaid rules on this issue, as well as all others, are rather complex, which is why you need to speak to your attorney about developing a Medicaid plan.