Is anyone aware of a Trust that protects a Medicaid applicant/recipient’s home from Medicaid’s Estate Recovery Plan that does not involve the 5 year look back period? I have done a lot of research & haven’t found any info on Trusts that do not mention the 5 year look back period. Mom lives in LA.

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In many states, only assets that go through probate are subject to medicaid recovery. So if you can settle the house without going through probate, then medicaid can't attempt recovery on it. One way is transferring it to a irrevocable trust. That's no different than just giving it to someone in terms of the look back period. There's a 2.5/5 year period of vulnerability.

Another way is a transfer on death deed. A TOD also avoids probate and thus avoids medicaid recovery in probate recovery only states. Unlike a transfer, to a trust or anyone else, there is no look back period. Since the primary residence is exempt for medicaid consideration while someone is alive. Then when they die, the house is transferred outside of probate which makes it ineligible for medicaid recovery.

So the big questions are, does LA have transfer on death deeds and is LA a probate recovery only state?

There are other ways to make a exempt transfer without a lookback period. For example, the child caregiver exemption. That allows for a parent to transfer the house to a child caregiver that has lived in the same house and provided care for 2 years. That's a federal law so works in every state.

It might be good to consult a competent lawyer in your state to see what your options are.
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Katiekate Jan 2020
Probate only applies after the person has died. Most states place a lien on the house to ensure the recovery at that time.

but, when she applies for Medicaid...if she is the only occupant of the house...she will have to spend that for her own care first.

after all, Medicaid is for people who cannot afford to pay for their own care. It is not to be used instead of the assets that person is trying to protect.

as for the exemption for a child who provided does not exempt the house forever....only as long as that person continues to live there...once the move, the lien will have to be paid in the sale.
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You need to talk to a lawyer versed in Medicaid. What I am telling you is in the State of NJ.

When you apply for Medicaid there is a spend down period. You are only allowed 2k in ur acct. All other assets have to be liquidated and spent down. For me, Mom private paid for 2 months in LTC and prepaid her funeral. You are allowed to keep your home and a car. This is where the value of "your" Moms home comes in. I think there may be something where the Market Value cannot exceed a certain amount. Your Moms might exceed that cap. If so, its looked as an asset. 440K could be used for her care.

Once you feel a LO needs Medicaid, you can not change anything within the five year look back. Doing a trust would look like your hiding assets. This is just my opinion. You can call ur local Medicaid office and ask if there is a cap for homes. If you sell Moms house for her care, it needs to be at Market Value to satisfy Medicaid. 440k could get Mom 3 yrs of LTC and 5/6 years in an AL private paying.
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That's exactly what they are asking, how to hide assets.
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If the trust was created 5 years or more before the person filing for Medicaid eligibility... then, yes this works.

but, anything within the 5 year look back will disqualify that person from Medicaid till the same dollar amount as the value of the asset is first spent on their care.
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lsugrad Jan 2020
What happens when the same dollar amount of as the value of the asset/home is spent on on her care? Current value of the home is approximately $440,000. Thank you!
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I'm bumping you up.
I think your best bet is to consult with a lawyer of financial planner that is familiar with medicaid, trusts and elder law in your state, you will need one anyway to set things up.
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