The Importance of Keeping Your Financial Records

November 30th, 2015 by beasleyferber

As most of our clients know, our firm does a great many Medicaid applications. It is hard to believe, but we have been doing them now for about 25 years. In the “old days,” doing an application was fairly easy. All you needed to do was to assemble some personal and legal records, and submit 30 months’ worth of financial records. Over the years, though, doing a Medicaid application has steadily grown harder and harder, and now it has become, sadly, a major ordeal. You need to submit five years’ worth of all of your records: statements of savings, checking, CDs, and all other bank records. You also need to submit statements of all of your other liquid accounts, such as stocks, bonds, mutual funds, IRAs, life insurance annual statements, and tax returns.

Most people do not normally keep these records, and if you do not have them, it is your responsibility to obtain them. Once you submit them, the caseworker creates what is known as a “lookback log.” This is a list of all transactions, whether deposits or withdrawals, of over $500. (I am working on a case now where the caseworker wants records of transactions as little as $450!). If it is an expenditure, you need to be prepared to prove how you spent the money. If it is a deposit, you need to know where the money came from. Of course, virtually no one keeps such records, and for five years at that! However, the new reality is that you need to do so. Our advice in this regard is to get a file cabinet for your records, and file them as they come in. For any transaction over $500, write on the statement itself what the transaction was about. Should you need Medicaid later on, you will be very glad you did this.

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