Medicaid Planning

Medicaid Planning 2018-02-22T02:16:09+00:00


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Medicaid is a joint federal and state program that covers long term care costs for applicants who meet health and financial eligibility requirements. The Medicaid program can be used to pay for care in your own home, in an assisted living facility or in a nursing home.

For an individual who is age 65+, blind or disabled to qualify for Medicaid, he or she must have no more than $15,150 in countable resources (in 2018). Your primary residence and certain retirement assets, however, are often treated as exempt resources.


Medicaid planning is the process of structuring your property to secure eligibility for Medicaid benefits so that you can pass your hard-earned assets to your family rather than paying for long term care.

The process of Medicaid planning is often complex and designed specifically for your particular set of circumstances, such as the composition of your family, the type of care required and the type of care likely to be required in the future.

The best time to plan to plan for Medicaid is before any care is needed. However, it is almost never too late to plan and protect a portion of your assets for your loved ones. Careful and proper planning, whether in advance or in response to a crisis, can help protect your property for your family.



For many of us, our home is our most valuable and cherished asset. It is the asset that we most want to protect and preserve for our family.

In many instances, when a Medicaid recipient passes away, Medicaid is permitted to recover for the benefits provided to the recipient by asserting a claim against the recipient’s “estate”. Under the current law, the term “estate” only includes the recipient’s probate estate. The probate estate is the portion of a deceased person’s assets that pass under a Will or according to the laws of intestacy. Therefore, by allowing your home to become subject to a probate or administration proceeding, Medicaid may have a right to assert a claim against the home upon your passing.

Under some circumstances, if the primary residence of a Medicaid recipient is not also occupied by a spouse or other designated family member, Medicaid has the right to impose a lien on the home during the recipient’s lifetime if the recipient becomes institutionalized and is not reasonably expected to return home.

So how can you plan to protect your family home?

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A transfer of your home to a properly drafted irrevocable trust will prevent Medicaid liens against the property during your lifetime and upon your death. Although your trust will own the residence, you retain the exclusive right to occupy and use the property. Upon your death, your beneficiaries will receive certain tax advantages when they inherit the property. Further, during your lifetime, you will keep your real estate tax exemptions and the house may be sold without losing your capital gains exclusion. The sale of the property during your lifetime would not impact your eligibility for Medicaid benefits provided the proceeds from the sale remain in trust.

A transfer of your home into an irrevocable trust is considered a gift under current Medicaid law, however. Such a gift would result in a penalty period of ineligibility for Medicaid benefits if nursing home care is needed within 5 years of completing the transfer. There is no penalty period in the event home care is needed.


A transfer of your primary residence subject to your retention of a life estate involves transferring your home to another individual (or individuals) while retaining the right to live in the premises during your lifetime. You will retain all real estate tax exemptions during your lifetime and upon your death, the individual(s) to whom you transferred the property will automatically receive the property with certain tax advantages. A transfer with a retained life estate, however, may adversely affect your ability to maximize your capital gains exclusion on the sale of the property during your lifetime. Additionally, the sale of the residence during your lifetime may adversely impact your eligibility for Medicaid benefits.

Depending on who the residence is transferred to, such a transfer with a retained life estate may be considered a gift under current Medicaid law. Such a gift would result in a penalty period of ineligibility for Medicaid benefits if nursing home care is needed within 5 years of completing the transfer.



Since a Medicaid applicant is limited as to how much they can own in countable resources, planning for Medicaid in advance typically involves the transfer of assets other than real property.

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One way to reduce your assets for Medicaid eligibility purposes is to simply give them away. There is no actual limit on how much you may give during your lifetime. However, an individual who makes a “taxable gift” during a calendar year is required to file a gift tax return reporting the gift. Taxable gifts are generally those gifts over the annual exclusion ($15,000.00 in 2018) to anyone other than a spouse or charity.

While gifting may be an effective way to protect assets for Medicaid purposes, there are a variety of other issue to consider such as tax basis, estate taxes and creditors of the transferee.


An irrevocable trust is not created just for the purpose of protecting your home. An irrevocable trust can be used to protect a variety of assets, including many types of countable resources. In many cases, an individual may establish an irrevocable trust which allows the individual to receive the income generated by the trust assets, but bars access to the trust principal. Such a trust is effective in preventing assets owned by the trust from being counted against a Medicaid applicant for eligibility purposes.


Even in a crisis situation, when long term care is needed immediately, planning options exist that can help protect some or all of your property for your family. These planning strategies often include the following:

  • Exempt transfers of assets (Transfers which do not result in a penalty)
  • Spousal refusal
  • Combination of gifting excess resources and loaning excess resources subject to the terms of a specially drafted promissory note.

It is never too late for Medicaid planning. In almost every situation, our team of professionals can devise a plan to save as much of your hard-earned assets as possible, limiting what you are required to spend on your own care.

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The Medicaid application process can be complex and confusing, especially to those who try to navigate the process without assistance from counsel experienced in this field.

Our staff of attorneys and social workers have extensive experience in successfully preparing applications involving home care, nursing home care, transfers of assets, spousal refusal, income overages and problems with supporting documentation. Incorrectly completing a Medicaid application or failing to provide the appropriate supporting documentation can have devastating consequences.

Considering the complexity of the Medicaid application process and the amount of incorrect information that exists on the subject, it is imperative that you seek the advice of experienced legal counsel when it comes to preparing and submitting your Medicaid application.

The job of an elder law firm does not end once a Medicaid application is approved. Often times, it is after Medicaid approval when true guidance is needed. That is why we offer assistance in not only obtaining Medicaid approval, but also in obtaining the right services for you or your loved one. Navigating the web of Community Medicaid home care services or selecting the right facility is often the most challenging aspect of the process.

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Coping with changes in a loved one’s health can be overwhelming. Caregivers are faced with a litany of new responsibilities, many of which they have not been “trained” to handle. For many caregivers, finding the right services for their love ones is a journey filled with misinformation and anxiety.

For our clients, we offer an assessment of the care needs of the individual and facilitate referrals for the right support services that are deemed necessary. We will collaborate with the client and their family to determine the right solutions to maintain the safety and happiness for all involved.

With experienced professionals in the geriatric care management field, we are happy to serve our clients like they were our own family.

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