Before the mistakes, one clarification that saves families more money than anything else in this guide.
Medicare is the coverage you earned by working, and it does not pay for long-term care. It covers up to 100 days in a skilled nursing facility after a qualifying hospital stay, with a daily copay through most of that window, and almost nobody gets the full 100 days.
Medicaid is the needs-based program, run jointly by the federal government and the state, and it does pay for long-term care with no time limit. It is the largest payer of nursing home stays in the country. If you want the eligibility rules and the current Michigan numbers, they are in the Michigan Medicaid guide. This guide is about the decisions families make around those rules.
Mistake 1: Thinking it is too late to plan
It is almost never too late. Even after someone has already moved into a nursing home, there are planning steps that protect a meaningful share of what is left. The options are narrower and the work is faster, which is what crisis planning exists for.
The families who lose the most are the ones who assumed the door had closed and never asked.
Mistake 2: Giving assets away too early
It is your money and your house. Take care of yourself first.
Signing the home over to a child feels like protection. What it usually does is start a Medicaid penalty clock, hand your child a capital gains problem, and put your own security inside someone else's marriage, business, and creditors. If they get divorced or sued, your house is in the room.
Mistake 3: Ignoring the safe harbors Congress built
Not every transfer triggers a penalty. Federal law specifically permits several, including transfers to a disabled child, to a caretaker child who lived with you and delayed your need for care, to certain siblings with an existing interest in the home, and into particular kinds of trusts for a person with disabilities.
These are real, they are written into the rules, and they get missed constantly because the family never knew to ask about them.
Mistake 4: Not using the protections for the spouse at home
Michigan does not intend for the healthy spouse to end up destitute so the other can receive care, and there are specific tools that protect them. Increasing the community spouse resource allowance, petitioning for a higher income allowance, and certain properly structured annuities all exist for this purpose.
This is the most underused set of protections in the entire system, and it is often worth six figures to the spouse who stays home.
Mistake 5: Applying too early
Filing at the wrong moment can create a longer period of ineligibility than the same family would have faced with better timing. The application date interacts with the look-back window and with any transfers already made.
Mistake 6: Applying too late
The mirror image, and just as costly. Every month you delay a filing you were eligible for is a month of care you paid for yourself and did not have to.
Timing an application is a strategy decision. It is worth one conversation before you file anything.
Before you spend anything down, call us.
Fifteen minutes now can protect assets that are impossible to get back later. No cost, no paperwork, no pressure.
Mistake 7: Not getting expert help
Most people go through this once in their lives, with tens of thousands of dollars on the line, working from what a neighbor or a well-meaning bank teller told them. It is a genuinely complicated area of law, and the cost of getting it wrong dwarfs the cost of getting help.
Mistake 8: Confusing estate recovery with a lien on the house
These are two different things and families mix them up all the time.
A lifetime lien is placed while the person is living, and there are a number of exceptions to it. Estate recovery happens after death, when Michigan seeks to recover what it spent on care from the person's estate. For estate recovery the exceptions are much narrower: essentially a deferral while a surviving spouse is living, and a hardship waiver.
Assuming the home is safe because it was exempt during life is how families lose it. Estate recovery has to be planned for separately, and a Lady Bird Deed is one of the Michigan-specific tools we use to do it.
Two paths, side by side
The following are illustrative scenarios, not actual clients, but they follow patterns we see constantly.
Bill and Sally, who did not plan
Bill and Sally are in their late seventies. Between Social Security and a pension they bring in about $2,600 a month. They own their home outright and have roughly $125,000 in savings. Then Bill has a stroke and needs skilled nursing care.
Michigan values a month of nursing home care at $12,216.30 under its 2026 Medicaid formula. Their monthly income does not come close. Sally does the math, sees the savings disappearing and the house going next, and decides to keep Bill at home and care for him herself.
She had heard Medicare might cover a few months and that insurance supplements would not help. Both were true. What nobody told her was that Medicaid would have paid for Bill's care, that she was entitled to keep far more than she thought, and that the family home did not have to be sold.
Sally provided care she was not able to provide. Within months her own health began to fail. Two people ended up worse off because of one gap in information.
Hank and Ellen, who planned early
Hank is 72 and Ellen is 69, both healthy, both retired. On a visit to their children, one of them asked what would happen if either parent got sick. They did not have an answer, so they made an appointment with an elder law attorney when they got home.
They owned their home and had $325,000 across their accounts. They expected to update their will and their powers of attorney. What they did not expect was learning they could protect most of it in advance.
They placed $200,000 and the house into a Medicaid Asset Protection Trust (MAPT) with their children as beneficiaries, so the funds were still reachable through their children if an emergency came. The remaining $125,000 went into a living trust, also called a revocable trust, for their living and travel expenses. Ellen added a long-term care insurance policy.
Six years later Hank had a severe stroke. Because the trust had been funded more than five years earlier, the $200,000 inside it, now grown, did not count against him. Hank qualified for Medicaid immediately. Ellen kept the home and nearly all of their remaining cash.
Same illness. Same state. Same rules. The only difference was five years of lead time.
What we would tell you on the phone
Plan early if you can, and call anyway if you cannot. The families who do best are the ones who asked before they had to.
When you do plan, make sure the plan gets finished. A Medicaid Asset Protection Trust protects nothing until the assets are actually titled into it, and the five-year clock does not start on the day you sign. It starts on the day the transfer happens. We handle that funding ourselves. We go to the bank, file the deed, and update the designations, because a plan that is sitting half-done is the same as no plan on the day it matters.
Since 2012 we have protected more than $2 billion in assets for over 2,400 Michigan families. Most of them called with the same sentence: I do not even know what I am supposed to ask.
One note. This guide is general information about Michigan Medicaid and elder law, not legal advice for your situation, and the 2026 figure above changes most years. What applies to your family depends on your circumstances, which is exactly what a free call is for.
