Don't think that it's too late to plan, even in the nursing home. Of course, planning before the fact is better than crisis planning, but in selected cases, some planning can be done even after a loved one enters a nursing facility.

When do you or your loved one plan to enter the nursing home?

Don't gift or give away your assets without a plan. It's important to understand all the Medicaid rules (and the new ones that seem to be generated yearly) before you start giving away the farm. You may be transferring funds too early, "gifting" money to kids and grandkids, thinking that it's covered under Medicaid spend-down. The IRS cares about the gifts. Medicaid considers those gifts a transfer.

Spending down without guidance could cause all kinds of tax and Medicaid issues.

Don't ignore the "safe harbors" created by Congress. It's not too often that Congress gives us something on which to hang our hat, so to speak. A few transfers, such as transfers to disabled children, certain siblings or into a trust for a loved one who is under 65 and disabled are some transfers which will not jeoopardize Medicaid eligibility.

Be sure to consult an elder law attorney to make sure that you're not spending down funds you might otherwise be able to keep.

Don't think that spouses of loved ones in a nursing home must become completely impoverished. There are protections available so that the "community spouse" (the spouse living at home) is not left penniless. Remember, the rules governing Medicaid spend down/transfer/spousal protection change regularly, but one that is still available is the purchase of an immediate annuity. Some states allow "spousal refusal" or the refusal to cooperate with the state regarding the spouse's Medicaid application.

Again, see an elder law attorney so that you are not penalized for illegal transfers which would disqualify your loved one for care in a nursing facility.

Haste makes waste. Don't apply for Medicaid too early. The new five-year lookback for Medicaid applications is being phased in and there's a complicated mathematical formula for determining exactly when an individual qualifies for Medicaid.

Your neighbor's, cousin's or coworker's scenario probably won't be the same as yours. Don't rely on them for information.

This is not a DIY project. Medicaid applications are complicated and the prospect of losing thousands of dollars should be enough to send individuals to an elder law attorney to be sure your planning is up to date.

You don't pull your own teeth or perform your own appendectomy, right?

Do you know what a "lifetime lien" is on property? What about estate recover? Are they the same?
"Estate recovery" means only a deferral for a survinving spouse and a hardship waiver. Lifetime liens on property, on the other hand have a number of exceptions.

Confused yet?