New Year, Same Myths: 3 Things People Still Get Wrong About Medicaid Planning

Medicaid planning remains one of the most misunderstood areas of elder law. At The Lansky Law Firm, we regularly meet with families who have done their research, talked with friends, or read advice online, only to discover that much of what they believed about Medicaid is incomplete, outdated, or simply incorrect.

As a new year begins, it is an ideal time to clear up some of the most persistent myths surrounding Medicaid planning. These misunderstandings are not just academic. Left unaddressed, they can lead to costly mistakes, delays in care, and unnecessary loss of assets at the very moment families need clarity and support.

Myth #1: “Medicaid Is Only for People With No Assets”

This is one of the most common misconceptions we hear at The Lansky Law Firm, and one of the most damaging.

Medicaid is income- and asset-tested, but it is not limited to people who are poor. Many middle-income families ultimately qualify for Medicaid long-term care benefits, but only after careful and strategic planning. In fact, Medicaid rules are designed for individuals who do have assets, such as a home, retirement accounts, or modest savings.

The real issue is not whether you own assets, but how those assets are titled, spent, or protected under Medicaid rules. Without guidance from an experienced Medicaid planning attorney, families often make decisions that unintentionally disqualify them just when care is needed most.

Myth #2: “The Nursing Home Takes the House”

Nursing homes do not take houses, and Medicaid does not automatically seize a home. This myth persists because the rules surrounding homes and Medicaid are complex and frequently misunderstood.

In many cases:

• A home may be exempt during a person’s lifetime, depending on marital status or whether a qualifying exemption applies, such as a caregiver child, a disabled child, or a sibling with an equity interest

• The home may still be subject to Medicaid estate recovery after death, depending on state-specific rules

• Transfers made at the wrong time can trigger Medicaid penalty periods related to the home

Without proper planning, families often discover too late that the home must be sold to repay Medicaid benefits. With proactive planning through The Lansky Law Firm, very different outcomes may be possible, including strategies designed to preserve the home or reduce unnecessary loss.

Myth #3: “I’ll Just Give Everything to My Kids”

Gifting assets without understanding Medicaid’s five-year lookback period is one of the most costly mistakes families make.

Unplanned transfers, especially of a home, can result in months or even years of Medicaid ineligibility. These penalty periods often occur at the exact moment long-term care is needed, forcing families to privately pay for care at significant expense.

In addition to Medicaid penalties, transferring assets to children without proper planning can trigger other unintended consequences, including:

• Capital gains tax exposure due to loss of stepped-up basis

• Gift tax reporting issues

• Loss of asset protection if a child faces divorce, lawsuits, or creditor claims

At The Lansky Law Firm, effective Medicaid planning rarely involves impulsive gifting. Instead, it often includes carefully structured trusts, strategic spend-down planning, and thoughtful timing decisions that align with Medicaid rules and your long-term estate planning goals.

Replacing Myths With Clarity

Medicaid planning is not about “beating the system.” It is about understanding and navigating a complex set of rules designed to balance access to care with personal financial responsibility.

The families who fare best are those who plan earlier rather than later, using accurate information and guidance tailored to their state’s Medicaid rules. Relying on outdated assumptions or something you “heard once” can be an expensive mistake.

While a new year does not change Medicaid law, it is an excellent opportunity to replace myths with clarity and ensure your long-term care plan is built on sound legal guidance.

Peace of Mind Through Preparation

If your Medicaid or long-term care plan is based on assumptions, now is the time to verify them. Thoughtful planning today can prevent unnecessary stress, delays in care, and financial hardship later.

Visit Us: 6800 Poplar Ave #225, Memphis, TN 38138

Call Us: (901) 767-7006

Learn More: www.lanskylawfirm.com

Take the time to safeguard your family’s future today. With careful preparation and guidance from The Lansky Law Firm, you can move forward with clarity, confidence, and true peace of mind.