Can I Restructure Assets to Qualify for Medicaid?

POSTED ON: January 10, 2022

Several types of special income trusts and other strategies can be helpful, when trying to protect your family’s assets from the devastating costs of long-term care.

Can I Restructure Assets to Qualify for Medicaid?

Some people believe that Medicaid is only for poor and low-income seniors. However, with proper and thoughtful estate planning and the help of an attorney who specializes in Medicaid planning, all but the very wealthiest people can often qualify for program benefits.

Kiplinger’s recent article entitled “How to Restructure Your Assets to Qualify for Medicaid says that unlike Medicare, Medicaid isn’t a federally run program. Operating within broad federal guidelines, each state determines its own Medicaid eligibility criteria, eligible coverage groups, services covered, administrative and operating procedures and payment levels.

The Medicaid program covers long-term nursing home care costs and many home health care costs, which are not covered by Medicare. If your assets exceed Louisiana’s resource threshold (a house, a car, a burial policy, and $2,000 of other assets), you can use a special kind of trust to transfer your assets into and qualify, within certain limitations.  To fully qualify, you will need to establish the trust and transfer your assets into it a within a certain time frame before you seek to qualify for long-term care benefits.  The time frame will depend in part on the value of the assets you transfer into the trust, but can be as long as five (5) years.

This type of trust is not the trust known as “revocable living trust”.  It is a different kind of trust that has different provisions.  But it can avoid probate.

This kind of trust is designed to create a legal pathway to Medicaid eligibility for those with too much resources to qualify for assistance, but not enough wealth to pay for the rising cost of much-needed care. Generally, your home’s value (up to a maximum amount) is exempt, provided you still live there or intend to return.  However, your home may be subject to “medicaid estate recovery” unless your trust is not set up in the right way.

If you don’t plan correctly, the state of Louisiana will require you to spend down other assets to around $2,000/person ($3,000/married couple) to qualify.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “Can I Restructure Assets to Qualify for Medicaid?” read these additional articles: How Can I Clean Up My Estate Plan? and How Do I Plan with a Special Needs Child? and How Do I Give My Children the Summer Home? and Any Ideas How to Pay for Long-Term Care?

Reference: Kiplinger (Nov. 7, 2021) “How to Restructure Your Assets to Qualify for Medicaid”

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