Protecting Assets when Qualifying for Medicaid

Many Louisiana residents are unaware of the many options available to preserve assets by avoiding Medicaid spend-down when qualifying for Medicaid long-term care benefits. I meet with many people who are under the impression that there is not much they can do protect their assets from Medicaid spend-down. They may have received incorrect information from a Medicaid caseworker, an attorney, an assisted living facility or a nursing home. I will highlight a few of the options available in Louisiana to help protect some of your assets from Medicaid-spend-down. Some of these strategies require planning ahead of a long-term care need. Other strategies can be utilized when no pre-planning was done and placement in a nursing home is eminent.

One way to protect your assets is to transfer your assets more than five years prior to applying for Medicaid (the look-back period). Assets transferred outside of the look-back period are fully protected from Medicaid spend-down. We typically recommend transferring your assets to an irrevocable trust. Click here for more information about irrevocable trusts and Medicaid planning.

Maximize the use of exempt assets. Here are some of the exempt assets under Louisiana Medicaid: your home, burial funds/funeral contracts, burial spaces, cash value life insurance with a maximum death benefit of $10,000, one automobile, household contents and personal effects.

Annuitize assets for the benefit of the spouse at home. If certain criteria are met, assets may be annuitized and paid to the spouse at home. The annuity must be “Medicaid compliant” to avoid the penalty for making a transfer for less than fair market value.

If gifts were made during the look-back period, the gift may be “cured” by returning the gift. By curing the gift, the penalty imposed on the gift is avoided. In some cases we use a gift and annuity strategy to help protect some of the assets from spend-down.

Do not attempt these or any other Medicaid planning strategy without the advice of a qualified elder law attorney. This post is a brief summary of some of the tools elder law attorneys use to help protect Louisiana residents from Medicaid spend-down. If you have questions or would like more information about strategies to help preserve assets from Medicaid spend-down contact lawyer, John Sirois at 985-580-2520 or . You can also learn more about Louisiana Medicaid in John’s book, Louisiana Retirement and Estate Planning or visiting the Medicaid and Long-Term Care section of John’s website