How a “Medicaid Trust” Made My Parents Millionaires on Paper, But Eligible for Free Care
The Legal Shield That Protected Our Legacy
My parents had worked their whole lives to build a legacy—their home and a healthy savings account. They were terrified that one long-term illness would wipe it all out. More than five years before they needed care, we worked with an elder law attorney. He helped them create an “Irrevocable Medicaid Trust.” They transferred their house and investments into the trust. They no longer personally owned the assets, but they could still live in their home. When my dad later needed nursing home care, their “countable” assets were near zero, making them eligible for Medicaid.
The 5-Year Look-Back: A Financial Planner’s Guide to Legally “Timing” Your Gifts
The Most Important Countdown Clock in Your Financial Life
Medicaid’s five-year “look-back” period is the most important rule in long-term care planning. When you apply for care, the state will look back at all your financial transactions for the last 60 months. Any money you gave away during that time can result in a penalty, delaying your coverage. My parents wanted to help with my down payment on a house. We planned carefully. They gave me the gift, and we marked the date on our calendar. We knew the clock had started. We were all healthy, and we prayed that they wouldn’t need care before that five-year clock ran out.
How an ABLE Account Lets My Disabled Son Save $100,000 Without Losing His Benefits
The Savings Account That Didn’t Count
My adult son has a disability and receives both SSI and Medicaid. These programs have a strict $2,000 asset limit, which meant he could never save any money. Then we discovered the ABLE account. It’s a special, tax-advantaged savings account for people with disabilities. He can save up to $100,000 in his ABLE account, and the money does not count against his asset limit for benefits. It has given him financial independence. He can now save for a car, an apartment, or education without the fear of losing his essential healthcare coverage.
The “Medicaid Compliant Annuity”: The Financial Product That Can Solve Your Long-Term Care Problem Overnight
The Last-Minute Move That Saved Our Family
My dad had a sudden stroke and needed nursing home care immediately. He had about $80,000 in savings, far too much to qualify for Medicaid. We didn’t have five years to plan. An elder law attorney guided us to a “Medicaid Compliant Annuity.” We used Dad’s excess savings to buy this special financial product. It instantly converted his countable asset (cash) into a non-countable income stream. This move reduced his assets on paper to almost zero, making him eligible for Medicaid coverage practically overnight. It was a powerful, legal, last-minute solution.
How to Use a “Life Estate” to Keep the Family Home and Still Qualify for Medicaid
The Deed That Let My Mom Stay, and Protected the Future
My mom wanted to ensure I would get the house after she passed, but we were worried about future long-term care costs. We worked with a lawyer to create a “Life Estate” deed. It’s a special deed where my mom retained the right to live in the house for the rest of her life (her “life estate”), and I became the “remainderman.” The house was no longer fully her asset. Because she did this more than five years before needing care, when she eventually did apply for Medicaid, the house was protected.
The “Spousal Refusal” Strategy: A Controversial But Powerful Way to Protect a Healthy Spouse’s Assets
The “No” That Protected My Mom
My dad needed nursing home care, but my parents’ combined assets were too high to qualify for Medicaid. My mom was healthy and needed their savings to live on. An attorney told us about a drastic but powerful strategy: “spousal refusal.” My mom formally, in writing, refused to contribute her share of their assets to my dad’s care. This made my dad instantly eligible for Medicaid. The state then had the right to sue my mom to recoup costs, but it gave her leverage to negotiate a fair settlement. It’s a hardball tactic, but it protected her from poverty.
My Parents Owned a Small Business. Here’s How We Structured It to Get Them on Medicaid.
Protecting Our Livelihood from the Nursing Home
My parents’ small hardware store was their life’s work. When my dad got sick, we were terrified they would have to sell the business to pay for his care. We learned that for Medicaid purposes, “income-producing property” can often be considered a non-countable asset. We worked with an attorney to make sure the business was structured correctly as an LLC. We kept meticulous records showing it was still a legitimate, operating business. Because it was their source of income, Medicaid did not force them to liquidate it, and our family’s livelihood was saved.
Retirement Accounts (IRA, 401k) and Medicaid: A Guide to What’s Protected
The Nest Egg We Didn’t Have to Crack Open
My dad had a modest IRA, and we were sure he’d have to cash it out to pay for his nursing home care. We were relieved to learn that in many states, retirement accounts like IRAs and 401(k)s are not considered “countable assets” for Medicaid eligibility, as long as they are in “payout status.” This meant my dad had to be taking the required minimum distributions. The amount he took out each month was counted as income, but the much larger principal balance in the account was protected.
The “Spend-Down” Strategy: How to Pay for Things You Need Anyway to Become Eligible Faster
The Smartest Shopping Spree of My Mom’s Life
My mom had about $10,000 more in her savings account than the Medicaid asset limit allowed. The nursing home told us she had to “spend down” that money before she could be eligible. We didn’t just waste it. We went on a strategic shopping spree. We pre-paid for her funeral expenses in full. We bought her a new, high-quality wheelchair that was more comfortable than the standard one. We even paid off her old credit card debt. We used her money on things she needed anyway, which legally and quickly reduced her assets.
How a “Personal Services Contract” Legally Transformed My Inheritance into Caregiver Payments
The Contract That Let My Mom Pay Me for My Love
My mom wanted to give me a portion of her savings, but we knew a simple “gift” would be penalized by Medicaid. I was already her primary caregiver, spending hours a day helping her. We worked with an elder law attorney to create a “Personal Services Contract.” It was a formal agreement that paid me a fair, documented hourly wage for the specific caregiving tasks I was performing. The payments were for services rendered, not a gift. It was a legal way for her to compensate me while also spending down her assets.
The Truth About “Medicaid Planning”: When to Start and Who to Hire
The Plan We Started a Decade Early
“Medicaid planning” isn’t something you do when your parent gets sick. That’s too late. The real planning starts years, even decades, earlier. It’s just good estate planning. We sat down with my parents when they were in their healthy 70s. We hired a certified elder law attorney—not just any lawyer—to review their assets and create a trust. The cost of hiring an expert early was a tiny fraction of what we would have lost if we had waited for a crisis. The planning gave us peace of mind for the next decade.
How Life Insurance Can Sabotage Your Medicaid Eligibility (And What to Do About It)
The Policy That Became a Problem
My dad had an old “whole life” insurance policy that he’d paid into for 50 years. We discovered that the policy had a “cash surrender value” of $15,000. This cash value was a countable asset, and it was putting him over the Medicaid limit. We had a choice. We could cash out the policy and use the money to pay for his care until it was gone. Or, we could convert the policy into a new, smaller “paid-up” policy with no cash value. We chose the latter, which eliminated the asset and helped him qualify.
The “Child Caregiver Exemption”: The Loophole That Lets You Inherit the House
The Care I Gave, the Home I Kept
I moved back home to care for my ailing mother. For two full years, my round-the-clock care was the only thing that kept her out of a nursing home. When she finally did need to go into a facility, our lawyer told us about the “child caregiver exemption.” It’s a federal Medicaid rule. It says that if an adult child lives with and cares for a parent for at least two years, delaying their entry into a nursing home, the parent can transfer their home to that child without a penalty. My caregiving was rewarded, and our family home was protected.
A Guide to “Countable” vs. “Non-Countable” Assets (The List That Could Save You Everything)
The Two Lists That Mattered Most
When applying for Medicaid for my mom, I learned there are two magic lists. The “Countable Assets” list included her checking and savings accounts, stocks, and bonds. This list had to be below a very low limit, like $2,000. The “Non-Countable Assets” list was our savior. It included her primary home, one car, her personal belongings, and her pre-paid funeral plan. Our entire strategy was to legally move money from the first list to the second. By understanding this distinction, we were able to protect most of what she owned.
How to Sell a Home for a Parent on Medicaid Without Triggering a Penalty
The Sale We Had to Time Perfectly
My father was already in a nursing home on Medicaid, and we needed to sell his house to pay for extra things his care required. We had to be incredibly careful. The moment the house was sold, the proceeds would become a countable asset, making him instantly ineligible for Medicaid. We worked with a lawyer to time the sale perfectly. The day after the closing, we immediately used the entire sum to purchase a Medicaid-compliant annuity. This converted the cash back into a non-countable income stream, preventing any lapse in his coverage.
What Happens When a Medicaid Recipient Gets a Surprise Inheritance?
The Money That Could Have Ended It All
My aunt was living in a nursing home on Medicaid when her sister passed away, leaving her a surprise $40,000 inheritance. We knew if that money went into her bank account, she would immediately lose her benefits. We had to act fast. An elder law attorney helped us petition the court to have the inheritance placed directly into a “Special Needs Trust.” This allowed the money to be used for her benefit—for things Medicaid didn’t cover—without it ever technically being her asset. The trust protected both her inheritance and her healthcare.
The Financial Case for Long-Term Care Insurance vs. Medicaid Planning
The Insurance We Bought So We Wouldn’t Need Medicaid
My wife and I saw what my parents went through with the Medicaid spend-down process. We were determined to have more choices. When we were in our early 50s, we bought our own long-term care insurance policies. The premiums weren’t cheap, but the policy will ensure that if we ever need care, we can choose the facility we want and protect our assets for our children without having to rely on Medicaid. For us, paying for the insurance now was a better financial and emotional choice than having to spend down our life savings later.
How to Use a “Pooled Trust” for a Disabled Individual Over 65
The Trust That Let My Uncle Keep His Dignity
My uncle, who was 70 and disabled, received a small settlement from a lawsuit. The lump sum of money was enough to disqualify him from his Medicaid and SSI benefits. Because he was over 65, he couldn’t create his own special needs trust. The solution was a “pooled trust.” It’s a trust that is managed by a non-profit organization. We were able to deposit his settlement into the pooled trust. He didn’t control the money directly, but he could request distributions to pay for things that improved his life. It was a crucial tool for a senior with a disability.
The Tax Implications of Medicaid Planning Strategies
The Gift That Came With a Tax Bill
My parents transferred their highly appreciated stock portfolio into an irrevocable trust to protect it from future nursing home costs. It was a smart Medicaid planning move. However, we didn’t realize the tax implications. When the trust later sold the stock to provide some income, it had to pay a much higher capital gains tax than my parents would have. We learned that while these strategies are great for protecting assets from Medicaid, they can sometimes create unintended, and expensive, tax consequences. It’s essential to work with a planner who understands both.
“My Dad Gave Me the House 3 Years Ago.” Are We in Trouble?
The Gift That Fell Inside the Window
My dad had gifted me his house three years ago, when he was perfectly healthy. Now, after a sudden illness, he needed Medicaid for long-term care. We were in trouble. The gift fell squarely within the five-year “look-back” period. Medicaid treated the gift as an improper transfer. They calculated the value of the house and imposed a “penalty period”—a number of months where they would not pay for his care. We had to either give the house back or private pay for the nursing home until the penalty period was over.
How to Structure a “Special Needs Trust” for a Disabled Child’s Future
The Legal Fortress Around His Future
My parents’ biggest worry was how to provide for my brother, who has a severe disability, after they passed away. They knew that leaving him a direct inheritance would disqualify him from the SSI and Medicaid benefits he depends on. They worked with an estate planning attorney to create a “Third-Party Special Needs Trust.” They named me as the trustee. In their will, they left all of my brother’s inheritance to the trust, not to him. This legal fortress ensures the money can be used to enrich his life, without ever jeopardizing his essential benefits.
The Financial Pros and Cons of a “Lady Bird Deed”
The Deed That Avoided Probate, But Not Everything
My mom used a “Lady Bird Deed” for her house. It was a simple way to automatically transfer the house to me upon her death, avoiding the hassle and expense of probate court. It also meant she could keep control of the house during her lifetime. The pro was that it was easy and inexpensive. The con was that it did not protect the house from Medicaid’s five-year look-back period if she needed care, nor did it protect the house from Medicaid estate recovery after her death in some states. It’s a useful tool, but it’s not a complete asset protection strategy.
Can Medicaid Take My Retirement Income? A Guide to Protecting Your Pension and Social Security.
My Income Became My Co-Pay
When I went on long-term care Medicaid, I was worried they would take my entire Social Security check and my small pension. The truth was a bit different. They couldn’t “take” it, but I did have to “contribute” it. I was allowed to keep a small “Personal Needs Allowance” each month (around $60). I could also use my income to pay for my Medicare premium. But every other dollar of my retirement income had to be paid directly to the nursing home. Then, Medicaid paid the rest. My income became my share of the cost.
How to Strategically Pay Down Debt to Accelerate Medicaid Eligibility
The “Good” Debt That Helped Us Qualify
My parents had too much in savings to qualify for Medicaid. But they also had a small mortgage balance and some credit card debt. Our elder law attorney advised us to use their “excess” savings to pay off those debts completely. Paying off a legitimate, long-standing debt is not considered an improper “gift” by Medicaid. This strategy had a double benefit: it legally reduced their countable assets, helping them qualify for Medicaid sooner, and it also relieved them of the stress of those monthly payments. It was a win-win.
The Unofficial Guide to Finding a Qualified Elder Law Attorney
How We Found a Lawyer We Could Trust
We knew we needed a specialist to help with my dad’s Medicaid plan, not just any family lawyer. We didn’t just search online. First, we asked the social worker at the hospital for a referral. She gave us two names she trusted. Second, we went to the website for the National Academy of Elder Law Attorneys (NAELA) and searched for certified members in our city. We ended up interviewing two different attorneys before we chose one. We asked about their experience with cases like ours and their fee structure. It was a search for an expert, and it paid off.
A Financial Advisor’s Take on When to “Gift and Wait”
The Calculated Risk We Took
My financial advisor told me that the “gift and wait” strategy is a calculated risk. My parents were in their early 70s and in good health. They gifted a significant portion of their assets to a trust for our benefit. We then started the five-year “countdown clock” for the Medicaid look-back period. The risk was that if one of them needed care within those five years, there would be a penalty. But since they were healthy, it was a risk we were willing to take to protect their assets for the future. It’s a strategy that requires good health and good luck.
How Promissory Notes Can Be Used in Medicaid Planning
The Loan That Was Really a Gift
My dad wanted to give me a large sum of money, but we were worried about the Medicaid look-back period. Our lawyer suggested a strategy using a promissory note. My dad loaned me the money, and I signed a formal, legally-enforceable promissory note, agreeing to pay it back with interest over a period of years. Because it was a legitimate loan, not a gift, it was not subject to the same transfer penalties. It was a complex but effective way to move assets to the next generation while complying with Medicaid’s rules.
The “Half a Loaf” Gifting Strategy: Does It Still Work?
A Complicated Strategy That Is Mostly a Thing of the Past
A friend mentioned the “half a loaf” strategy. The idea was to gift away about half of your assets, which would make you ineligible for Medicaid for a certain penalty period. You would then use the other half of your money to private pay for your care during that penalty period. In theory, you would run out of money just as the penalty period ended, and Medicaid would kick in. The truth is, this is a very complex and risky strategy that has been largely eliminated by changes in the law. It’s not something most planners recommend today.
Protecting Your Assets When You’re Single vs. Married: A Tale of Two Strategies
My Mom’s Situation Was Very Different From My Aunt’s
When my married aunt needed Medicaid, the “spousal impoverishment” rules allowed my uncle to keep their house and a significant portion of their assets. But when my single mother needed care, the rules were much stricter. As a single person, she was only allowed to keep her house (with an intent to return home) and about $2,000 in countable assets. The financial protections for a single person are far, far lower than for a married couple. It’s a stark difference that makes early planning even more crucial for unmarried individuals.
The Danger of Joint Bank Accounts When Applying for Medicaid
The Account That Was 100% Hers, In Their Eyes
My elderly mother had put my name on her checking account years ago, just for convenience in case I needed to help her pay bills. When she applied for Medicaid, we were shocked to learn that the state considered 100% of the money in that joint account to be her asset, even though some of it was my money. We had to go through a complicated process of proving which portion of the funds I had contributed. The lesson was clear: joint bank accounts can create a huge headache and should be avoided during Medicaid planning.
How to “Cure” a Penalty Period if You Made a Gifting Mistake
The Gift We Had to Give Back
My dad gave me $20,000 for a down payment on a house, not realizing it would affect his future Medicaid eligibility. Two years later, he needed nursing home care, and the gift triggered a long penalty period. We were in a panic. Our lawyer told us the only way to fix it was to “cure” the transfer. I had to give the entire $20,000 back to my dad. We documented the return of the funds. This reversed the gift and eliminated the penalty period, allowing him to get the coverage he needed.
The Role of a Financial Power of Attorney in Medicaid Planning
The Document That Gave Me the Power to Help
When my mom’s memory started to fade, we knew we had to act. The single most important thing we did was have her sign a “Durable Power of Attorney for Finances.” This legal document gave me the authority to make financial decisions on her behalf if she became unable to do so herself. When it came time to apply for Medicaid for her, this document was essential. It allowed me to access her bank records, sell assets, and sign the application. Without it, my hands would have been tied.
Can I Buy a New Car or Pre-Pay for a Funeral to Spend Down Assets?
The Purchases That Were Legally Allowed
My mom had too much money in her savings to qualify for Medicaid. We needed to “spend down” her assets, but we wanted to do it wisely. We learned that certain purchases are allowed. She was allowed to buy a new, reliable car (one vehicle is an exempt asset). We also met with a funeral home and fully pre-paid for her entire funeral and burial service. This is another exempt purchase. By using her money on these large, permissible expenses, we legally reduced her countable assets and helped her qualify for the care she needed.
Understanding How Your State’s “Partnership” Program Can Protect More Assets
The Insurance That Rewarded Our Planning
My parents bought a special kind of “Partnership-Qualified” long-term care insurance policy. It was a partnership between the insurance company and our state’s Medicaid program. The rule was simple: for every dollar their insurance policy paid out for their care, the state would allow them to protect a dollar of their assets from the Medicaid spend-down rules. Because their policy paid out $200,000 for my dad’s care, they were able to keep an extra $200,000 in savings and still qualify for Medicaid afterward. It was a huge reward for their foresight.
The Financial Impact of a “Filial Support” Law in Your State
The Zombie Law That Is Mostly Harmless
I live in Pennsylvania, one of the states with a “filial support” law on the books. I was terrified that this law would mean I would be personally sued for the cost of my father’s nursing home care if he couldn’t pay. I consulted with an attorney. He explained that while the law does exist, it is very rarely enforced, especially when the parent is eligible for Medicaid. He reassured me that the chances of the nursing home coming after me personally were almost zero. It’s a scary-sounding “zombie law” that is mostly a relic of the past.
How to Calculate the “Penalty Period” for Improper Transfers
The Simple Math Behind Our Waiting Game
My mom gave my brother a gift of
50,000abouttwoyearsbeforesheneededMedicaid.Thiscreateda"penaltyperiod."Thecaseworkershowedushowitwascalculated.Shetooktheamountofthegift(50,000 about two years before she needed Medicaid. This created a "penalty period." The caseworker showed us how it was calculated. She took the amount of the gift (50,000abouttwoyearsbeforesheneededMedicaid.Thiscreateda"penaltyperiod."Thecaseworkershowedushowitwascalculated.Shetooktheamountofthegift(
50,000) and divided it by the state’s average monthly cost of nursing home care (which was $10,000). The result was five. This meant Medicaid would refuse to pay for my mom’s care for a penalty period of five months. We had to private pay for her care for five months before her Medicaid coverage would finally kick in.
The Most Overlooked Assets That Can Make You Ineligible for Medicaid
The Savings Bonds I Found in a Shoebox
When we were going through my dad’s finances for his Medicaid application, we thought we had accounted for everything. Then, in an old shoebox, we found a stack of U.S. Savings Bonds that he had forgotten about for 40 years. Their total cash value was over $10,000. This one forgotten asset would have been enough to make him ineligible. It was a wake-up call. We had to search everywhere—old safes, safe deposit boxes, under the mattress—to make sure we had found every single “countable” asset before we applied.
A Checklist for Your First Meeting with a Medicaid Planner
The Meeting That Set Our Course
Our first meeting with our elder law attorney was incredibly productive because we came prepared. We brought a checklist of documents with us: my parents’ wills and trusts, the deeds to their property, their most recent bank and investment statements, their life insurance policies, and their last two years of tax returns. We also wrote down a list of our questions in advance. Coming to that first meeting organized and prepared saved the attorney a lot of time and saved us a lot of money in fees.
The Cost of Waiting: How Procrastinating on Medicaid Planning Can Cost You Hundreds of Thousands
The Crisis That Could Have Been Avoided
My uncle always said he’d “get around to” his estate planning. He was in his 70s and in perfect health. Then, he had a massive, unexpected stroke. He needed long-term care immediately. Because he had done no planning, his family had to spend down his entire life savings of over $200,000 on his nursing home care before he could qualify for Medicaid. If he had created a trust just a few years earlier, all of that money could have been protected. The cost of his procrastination was his entire legacy.
How to Fund a Special Needs Trust Without Disrupting Your Own Retirement
The Life Insurance Policy That Will Fund Her Future
My wife and I wanted to make sure our disabled daughter would be provided for after we were gone. We created a Special Needs Trust for her. But we didn’t want to fund it by taking money from our own retirement accounts. Instead, we purchased a “second-to-die” life insurance policy. It’s a policy that pays out only after both of us have passed away. We named the Special Needs Trust as the beneficiary. It’s a cost-effective way to fund her future without sacrificing our own financial security today.
The Financial Impact of a Reverse Mortgage on Medicaid Eligibility
The Loan That Complicated Everything
My parents had taken out a reverse mortgage on their home years ago to supplement their retirement income. When my dad needed Medicaid, it created a complicated situation. The reverse mortgage itself didn’t disqualify him, as the house was still an exempt asset. However, the lump-sum payments they had received from the mortgage and put in their savings did count as an asset. And we knew that as soon as my dad passed away, the reverse mortgage would become due, forcing the sale of the house. It was a tangled financial web.
The “Income Cap Trust”: A Must-Have for Seniors in Certain States
The Trust That Solved the “Too Much Income” Problem
My father lived in Florida, which is an “income cap” state for Medicaid. His monthly income from Social Security and a small pension was just a few hundred dollars over the state’s strict income limit, even though he couldn’t afford his care. He was stuck. The solution was a special legal tool called a “Miller Trust” or an “Income Cap Trust.” We set up the trust, and his income checks were deposited directly into it. The trust then paid his share of the nursing home costs. This legal maneuver made him eligible for Medicaid.
How to Coordinate Medicaid Planning with Your Overall Estate Plan
The Two Plans That Must Work Together
My parents had a will and an estate plan they had made 20 years ago. But that plan was designed to minimize taxes. It was not designed to deal with the catastrophic cost of long-term care. When we started Medicaid planning, we had to make sure their new asset protection trust worked in harmony with their old will. It’s crucial that these two plans are not in conflict. An elder law attorney can ensure that your goal of protecting assets for Medicaid doesn’t accidentally disrupt your wishes for who inherits your property.
The Red Flags of a Bad Medicaid Planner or Financial Advisor
The “Planner” We Fired Immediately
We almost made a huge mistake. We met with a “senior financial advisor” who promised he could “hide” my parents’ assets from Medicaid. That was a huge red flag. He also pushed us to buy a specific annuity product from which he would get a big commission. A good planner will be a certified elder law attorney (CELA) or a financial advisor with a fiduciary duty to you. They will educate you on legal strategies, not promise to hide money. We walked out of that meeting and found a real professional.
Case Study: How the Smith Family Protected $500,000 in Assets and Got Long-Term Care
The Plan That Saved Half a Million Dollars
The Smith family had a home worth $300,000 and about $200,000 in savings. Six years before Mr. Smith got sick, they worked with a lawyer. They put their home and their savings into an irrevocable trust. They continued to live in their home and live off the interest from the trust. When Mr. Smith finally needed nursing home care, the assets in the trust were protected because they were outside the five-year look-back period. His “countable” assets were near zero. He qualified for Medicaid, and their half-a-million-dollar legacy was preserved for Mrs. Smith and their children.
The Future of Asset Protection: What Changes Are Coming to Medicaid Rules?
The Rules Are Always Changing
The world of Medicaid planning is constantly evolving. The laws today are not what they were ten years ago. Some states are trying to shorten the “look-back” period, while others are trying to expand estate recovery efforts. The only constant is change. This is why you cannot rely on old advice from a friend or an article you read online years ago. You must work with a qualified elder law attorney who is up-to-date on the most recent federal and state-specific regulations. What worked for your neighbor might not work for you today.
Can I Just Give My House to My Kids? The Simplest Question with the Most Complicated Answer.
The “Simple” Gift That’s a Huge Mistake
It seems like the simplest solution: just sign the deed to your house over to your kids to protect it from the nursing home. It is almost always a terrible idea. First, if you do this within the five-year look-back period, it will trigger a massive penalty from Medicaid. Second, you lose all legal control over your own home. Your kids could sell it, or it could be taken in their own divorce or bankruptcy. And third, it can create a huge capital gains tax problem for your children down the road. It’s a simple act with devastatingly complex consequences.
How to Use a Rental Property in Your Medicaid Plan
The Income Property We Couldn’t Keep
My dad owned a small duplex that he rented out. When he needed Medicaid, we learned that this rental property was a problem. Unlike his primary home, a non-primary residence is a “countable asset.” He was forced to sell the property. The proceeds from the sale then had to be “spent down” on his care before he could become eligible for Medicaid. The income-producing nature of the property didn’t protect it. For Medicaid purposes, it was just a valuable asset that had to be liquidated.
The #1 Financial Mistake Families Make When a Parent Gets Sick
The Panic That Cost Them Everything
The number one mistake I see families make is panicking. When a parent has a sudden health crisis, the family starts writing huge checks to the nursing home from the parent’s savings, thinking they have to. They drain the life savings in a matter of months. They don’t realize they should have paused, taken a breath, and immediately consulted with an elder law attorney. The lawyer could have shown them legal ways to protect a significant portion of those assets. The biggest mistake is acting out of fear instead of acting with a plan.
From Millionaire to Medicaid: The Surprising Stories of People Who Needed It Most
The Cost of Care Can Bankrupt Anyone
I used to think Medicaid was only for people who had been poor their whole lives. As a social worker, I’ve seen it all. I helped a former doctor who had saved over a million dollars, but his wife’s 10-year battle with Alzheimer’s, at a cost of $12,000 a month, had wiped out their entire fortune. I helped a woman who owned a successful business but had a catastrophic stroke. The cost of long-term care in America is so astronomical that without proper planning, it can force even wealthy families to turn to Medicaid as their final safety net.