Depending on the size and timing of gifts and transfers, applying at the wrong time can potentially be disastrous. I heard a story once about a professional accountant and his mother. Rather than hire an elder law attorney, he decided to go the Do-It-Yourself route. He read about the Medicaid rules and planning techniques. He thought he understood them and he transferred $500,000 to an irrevocable trust.
He then began paying for his mother’s care through what he thought the ineligibility period (also sometimes called a ‘penalty period’) was and then he filed the Medicaid application. But it turned out that the application was not submitted at the right time. As a result, his mother had to start a new ineligibility period (in this case of 100 months due to the size of the transfer!). This is an easy mistake to be made by someone that does not work in the area of Medicaid planning.
Of course filing too late can also cost your family thousands in lost benefits, so it is critical to apply at just the right time.