How can I protect my family’s assets, without disqualifying mom from Medicaid?

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Q: How can I protect my family’s assets, but not disqualify my elderly mother from Medicaid benefits?

A: A thorough answer will depend on the age and health of your mother, the state she resides in, the amount of her income and assets, and how soon she might need to apply for Medicaid.

However, rest assured that indeed there are many techniques for protecting your mother's assets while qualifying her for Medicaid. If you have at least five years to plan, then use of an irrevocable trust could be a good option. Once the trust is created (you will need an attorney to prepare this for you), your mother transfers most of her assets into the trust. After five years, none of the trust assets can be counted when your mother applies for Medicaid.

If you think your mother may not be able to wait that long before needing nursing home care, then a combination of an outright gift to her children and a purchase of a "Medicaid annuity" can protect roughly half of her assets. This technique can be done immediately, even if the parent is already in a nursing home.

A Medicaid annuity is a special type of annuity that is irrevocable, non-transferable, immediate, and fixed to equal monthly payments. With the right type of annuity, it is non-countable as an asset for Medicaid purposes, and the purchase is not considered a gift that might otherwise cause a disqualification period.

K. Gabriel Heiser is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.

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18 Comments

What fee does an Elder lawyer charge?
My father in law is in a nursing home and on medicaid. I was told that everything Medicaid pays out, when that person passes, will be required to be paid back from everything that person owns. Is this true? We live in his house and have no intentions on selling when he does pass, but am concerned that the state will take it for re-embersement for his care. Does anyone know? Please help
weeziegoodyear -
Answer: A lot!!