What are some legitimate ways to spend down one's assets to qualify for Medicaid?
Asked by: Noble Leuschke | Last update: September 28, 2025Score: 4.8/5 (24 votes)
- Purchase or improve exempt assets. Medicaid allows individuals to retain their primary residence, one vehicle, furniture, and personal property. ...
- Pay off debts. ...
- Set aside funds for a funeral. ...
- Purchase a Medicaid Compliant Annuity.
What qualifies as spend down for Medicaid?
During the “look back”, all past transfers are reviewed. If one has gifted assets or sold them under fair market value during this timeframe, a Penalty Period of Medicaid ineligibility will be established. California has no asset limit (eff. 1/1/24), and therefore, Asset Spend Down is not relevant for this state.
How do I protect my assets when applying for Medicaid?
Medicaid is a crucial resource for long-term care but has strict eligibility requirements. Asset protection is essential to safeguard your financial future and qualify for Medicaid. Irrevocable trusts, Miller trusts, and life insurance are common asset protection strategies.
What is an exempt asset for Medicaid?
There are “countable assets” and “exempt assets”. An applicant's home furnishings and appliances, personal items, vehicle, and generally their home, are exempt. For home exemption, an applicant (or their spouse) must live in their home or the applicant must have “Intent to Return”.
How does Medicaid verify assets?
Required documentation to be provided by the applicant might include checking, savings, money market, credit union, and certificates of deposit (CD) account statements, life insurance policies, deeds or appraisals for one's home and other real estate, copies of stocks and bonds, deeds to burial plots, and copies of pre ...
Too Much Income for Medicaid? What Can I Do?
Does Medicaid monitor your bank account?
Medicaid agencies can check your account balances at any financial institutions you use during the month you apply or during a 60-month look-back period.
What does verification of assets include?
Asset verification is a process that financial services use to confirm the existence, ownership, value, and authenticity of a person's or entity's assets. This process is part of financial activities including loan applications, wealth management, and regulatory compliance to manage risks and mitigate fraud.
Do I have to sell my house to qualify for Medicaid?
Note: California stands apart from the other states. CA eliminated their Medicaid (Medi-Cal) asset limit effective 1/1/24. Medi-Cal applicants and beneficiaries can have unlimited assets and still be eligible for Medi-Cal. They could sell their home and it have no impact on their eligibility.
What are Medicaid non-countable assets?
Medicaid Non-Countable Assets
An essential non-countable asset is your home. Your home remains a non-countable asset even if you move into a nursing home, so long as your spouse or dependent is living in the home or you have an intent to return.
What is considered a non exempt asset?
Usually, assets or property that are not considered essential for you to live or work could be classified as nonexempt and may be sold by the trustee to repay your creditors. Examples of nonexempt assets that can be subject to liquidation: Additional home or residential property that is not your primary residence.
Do nursing homes take your assets?
Neither the nursing home nor the government will seize your home to cover expenses while you are living in care. However, if you run out of funds to pay for the care you need, your estate's assets may be taken after your death to cover those costs.
How much does it cost to set up an asset protection trust?
Initial legal fees - To properly establish an asset protection trust, most attorneys will charge between $5,000-$10,000 on average. High asset trusts or complex situations may be $15,000+.
Can Medicare take money out of your bank account?
Medicare Easy Pay is a free way to set up recurring payments to pay your Medicare premiums. With this service, we'll automatically deduct your Medicare premiums from your checking or savings account each month. The amount being deducted from your account will update automatically when your premium changes.
How do I get Medicaid if I make too much money?
States have the option to establish a “medically needy program” for individuals with significant health needs whose income is too high to otherwise qualify for Medicaid under other eligibility groups.
What is a Miller trust?
Miller Trusts, also called Qualified Income Trusts, provide a way for Nursing Home Medicaid and Medicaid Waiver applicants who have income over Medicaid's limit to become income-eligible for Medicaid long-term care.
Can I buy a car while on Medicaid?
Certain assets, though, such as cars and homes, are considered "non-countable," meaning they aren't considered when a Medicaid agency determines your eligibility. However, by spending a large amount on a given item — in this case, a vehicle — the agency is likely to consider the purchase an investment.
How do I protect cash assets from Medicaid?
A Medicaid Asset Protection Trust is exactly as it sounds—a trust designed to protect assets from being counted for Medicaid eligibility. An MAPT allows a person to qualify for long term care benefits from Medicaid, while protecting assets from being depleted if long-term care is needed.
What resources are exempt from Medicaid?
Household goods and personal effects are resources that are not counted (are excluded) for the purpose of determining Medicaid eligibility. Personal effects include, but are not limited to, clothing, jewelry, items of personal care, recreational equipment, musical instruments and hobby items.
Which of the following is not usually a counted resource when applying for Medicaid?
Assets that do not get counted for eligibility include the following: Your primary residence. Personal property and household belongings. One motor vehicle.
Can Medicaid go after house?
While Medicaid cannot attempt Estate Recovery if there is a surviving spouse, some states will attempt to collect after the death of the surviving spouse, while other states will not. California and Texas are two states that prohibit Estate Recovery after the death of the non-Medicaid spouse.
Can a nursing home take your inheritance?
No one “takes” assets from the patient; the nursing home simply requires payment for its services if the patient intends to reside in the nursing home. The notion of assets being seized by the government or a nursing home is only one of several misconceptions about paying for long term care.
Will I lose Medicare if I sell my house?
What Happens to My Medicare if I Sell My House? Selling your home could lead to higher Medicare premiums if your taxable income sees a boost. Although your Medicare benefits shouldn't change when you sell your home, your monthly premiums may. It depends on whether the sale of your home affects your taxable income.
How do you provide proof of assets?
In most instances, you'll need to provide documents to show proof of assets. The specific documents you need will depend on the type of asset, but brokerage statements and bank statements are commonly used to show proof of assets.
What are the two methods of valuation of assets?
There are two main axes on which to think about asset based business valuation. The first is the asset valuation methodology, and the second is the type of asset you are trying to value. There are many different methodologies, but the most common are the cost approach, the market approach, and the income approach.
What is financial goodwill?
Goodwill is an intangible asset that accounts for the excess purchase price of another company. Goodwill includes proprietary or intellectual property, brand recognition, and other aspects of a company that are valuable but not easily quantifiable.