Top Long Term Care Planning Mistakes

Over the past 13+ year I’ve been able to help many families through what we call the elder care journey from healthy vigorous senior through home assistance, assisted living and nursing home care.  Some of the more common mistakes that I see people make are the following:

1.  Believing Medicare covers long term custodial nursing home care (it does not);

2.  Thinking that a transfer of $12,000 per person per year will not cause Medicaid ineligibility (there is no gift tax but there is a Medicaid transfer penalty);

3.  Failing to account for transfer penalties and loss of control of assets when trying to protect assets (I’ve seen disastrous outcomes because of it);

4.  Failing to consider negative tax consequences and disruption of estate plan when transferring assets;

5.  Transferring assets without providing a plan for where sources of funds will come from should long term care be necessary within the next 5 years after the transfer;

6.  Confusing the Medicaid lookback and transfer penalty (they are not the same);

7.  Believing that it is too late to plan (it rarely is);

8.  Failing to recognize the sense of urgency in doing long term care planning by telling yourself "I’ll wait till it looks like I will need long term care" (the earlier the planning the more that can be protected);

9.  Believing that long term care planning means I will lose control of my assets and my decision making (in fact the opposite is true);

10. Hearing what other family members, friends or acquaintances have done and do exactly the same because it sounds like your situation is identical to theirs (it never is, every situation is unique, just as every person is unique);