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Protect Your Assets with Medicaid Planning Strategies


While you may think that you’ll never need long-term care considering your current state of health, data from the US Department of Health and Human Services says otherwise. A person who turns 65 years old today faces a 70 percent chance of needing such services at some point in the future. Plus, 27 million people are expected to be residing in an assisted living center by 2050. Considering that the cost for a private room averages almost $7,700 per month – or $92,000 annually – it’s smart to at least prepare for the financial implications.

Fortunately, there are strategies that allow you to take advantage of Medicaid benefits to pay for long-term care, while also protecting your assets. The relevant laws are complicated and you may even face penalties if you don’t follow them to the letter, so it’s wise to work with a Florida elder law attorney. An overview on Medicaid planning for long-term care may also be helpful.

The Role of Medicaid in Long-Term Care: In general, the sources you can use to pay for long-term care include your own money, insurance, and Medicaid. For individuals without insurance or other financial means, Medicaid steps in as the payer of last resort. However, as a government benefit, there are strict eligibility rules. Your income must fall under a certain threshold and, when that happens, you may have depleted significant assets. Plus, when a Medicaid recipient passes away, officials will take action termed “estate recovery” to recoup the amounts from your estate.

As such, Medicaid planning aims to accomplish two goals:

  1. Protect assets from being depleted to pay for long-term care; and,
  2. Prevent property from estate recovery at your death.

Medicaid Planning Strategies: The point of asset protection in the context of Medicaid is to legally not own them – without running afoul of the “lookback” period for transfers, which can lead to penalties. Though the specifics are very complicated, some basic options to discuss with an elder law attorney include: 

  • Medicaid trust, where assets are owned by the trust and you have no control due to irrevocability;
  • Personal caregiver agreement, in which you pay someone for caretaking services – thereby reducing what assets are counted for Medicaid;
  • Qualifying lifetime gifts that allow you to spend down your assets, though you may incur gift taxes.

In addition, you might consider a unique arrangement in Florida: Spousal transfer and refusal. Essentially, you transfer assets to your spouse, which you can do without triggering issues on the lookback period. Then, your spouse refuses to provide essential support. Because you’ve transferred your assets, you may be eligible for Medicaid as long-term care. 

Reach Out to an Elder Law Attorney in Dade City, FL 

There are additional planning strategies for protecting your assets, though the details depend upon your unique circumstances. Our Dade City elder law attorneys at The Law Office of Laurie R. Chane can explain them after reviewing your situation, please call 352-567-0055 or complete our online contact form to set up a consultation. We serve clients throughout Pasco County, so we’re happy to assist.



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