8 Mistakes Medicaid applicants make

1. Failure to maintain properly a Qualified Income Trust (QIT). A QIT is needed to hold income when one’s income is more than $2022 a month.
2. Making gifts to reduce a Medicaid applicant’s assets. Making most gifts will cause Dept. of Children and Families to deny your application.
3. Failing to plan for possibility that spouse at home may predecease the spouse institutionalized. By the one spouse leaving assets to the Medicaid spouse it will cause them to lose their Medicaid benefits. Need to leave assets in will to special needs trust for the institutionalized spouse.
4. Relying on outdated or poorly drafted durable powers of attorney. Many Powers of attorney fail to specify authority to make gifts and/or enter into personal service contracts.
5. Gifting without taking into account the transfer rules and penalties. Any gift within 60 months of seeking Medicaid benefits will delay eligibility for Medicaid approval. Transfers without fair market value can be a problem.
6. Failure to liquidate certain life insurance policies that possess cash surrender value. If cash surrender value of the policy is more than $2500 yo0u have to liquidate these policies before applying for Medicaid.
7. Failure to have funeral contact made irrevocable. A revocable pre-paid funeral contact for more than $2500 is considered an asset. This can cause denial of the application.
8. Failing to list all assets, income and gifts within a 60 month period prior to filing the request for assistance is a serious crime. There is a 5 year look back period which might include gifts that would delay eligibility for Medicaid benefits. Failing to notify DCF within 10 days following any changes in assets or income violates the law.