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Medicaid Planning Strategies: Using Trusts To Protect Your Assets


While there is no doubt that creating an estate plan should be a priority for Floridians of all ages, many people tend to overlook a key issue as they start to get older: Long-term care needs. It is estimated that 7 out of 10 individuals will require some type of assistance in their lifetimes, and the costs of long term care might shock you: In-home care runs around $4,500 per month, while an assisted living facility could range from $4,300 to $8,821 depending on the level of services. You may have options to pay through your own resources or insurance, but Medicaid is also an option for qualifying individuals.

However, there are strict rules for Medicaid as a needs-based government program. You cannot be too “rich,” yet you are also subject to rules that prohibit certain transfers of assets. Fortunately, you may be able to take advantage of trusts for purposes of Medicaid planning, and a Dade City elder law attorney can assess the details. Some background information may also help you understand the basics. 

Key Objectives of Medicaid Planning 

To best understand the benefits of Medicaid for long-term care, the starting off point is eligibility. If your assets and/or income are above a certain threshold, you do not qualify for Medicaid. Therefore, you might assume that you can become eligible by spending down your estate or transferring assets to others. Still, you need to note the following:

  • By reducing your net worth, you deplete any legacy you might hope to pass on to family.
  • Some asset transfers are prohibited by Medicaid’s lookback rules, which focus on transactions within the five years before you apply. A violation could result in penalties and a determination that you do not qualify.
  • Once you are eligible and receive Medicaid, officials can still recoup amounts after your death through the estate recovery process. 

How a Medicaid Irrevocable Trust Meets Planning Objectives 

With the above points in mind, it is helpful to review some general information about Medicaid trusts in elder law. Essentially, you want to legally own less without compromising transfers under the five-year lookback period. A properly constructed trust can prevent assets from being counted for eligibility because the Medicaid recipient officially does not own them.

One critical point is that, to gain the advantages of qualifying for Medicaid, the trust MUST be irrevocable. Many people do create revocable trusts to achieve certain estate planning goals, but this structure will not be effective for Medicaid eligibility. When the grantor still has the power to revoke or change the terms of the trust, the assets within it are considered being owned by the Medicaid applicant/recipient. 

Learn More from a Florida Elder Law Attorney 

To learn more about trusts and other options for Medicaid planning, please contact The Law Office of Laurie R. Chane at 352-567-0055 or via our website. We can schedule a consultation with an elder law attorney who can review your circumstances and determine strategies that work for your family.



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