As long as you have assets and an income that is counted as yours, your options for long-term care could be limited. You cannot outsmart the system by simply giving away your home and all your money several months before applying for Medicaid. There are number of strategic ways to “spend down” assets as a means of qualifying for Medicaid. Also note:
- Asset transfer to family: If you wish to protect your assets so they can be passed down to your children, you need to proactively plan to protect these assets at least five years before you might need Medicaid. If you transfer assets to your family less than five years before applying for Medicaid, there is a penalty of a period of time before you will start receiving assistance if you are otherwise eligible. A quick way of determining this penalty is add up all gifts given within 60 months of applying for Medicaid, and divide that number by 6,000. So if you give your home with $120,000 equity to your children one year prior to applying for Medicaid, you will be ineligible to receive Medicaid benefits for a period of 20 months.
- Trusts: Any assets held in a revocable living trust are deemed to be assets by Medicaid. Before applying for Medicaid, assets held in this type of trust must be removed
The best action you can take when it comes to a Medicaid planning strategy is to first consult with an experienced attorney that is knowledgeable in estate planning, Medicaid, and Veteran planning.