The increasing costs of long-term care pose a financial challenge for many families. The program’s strict income and asset limits can be daunting for those who turn to Medicaid to help cover these expenses. However, as Vincent J. Russo of the Russo Law Group emphasizes, “It’s never too late to implement Medicaid planning to protect some, if not all, of your assets.” Proactive steps can make a significant difference in safeguarding your financial well-being while qualifying for essential benefits.
Here, we’ll explore various strategies for protecting your assets and why working with a trusted elder law attorney is vital for success.
Protecting Your Assets While Qualifying for Medicaid
Medicaid’s financial eligibility rules are strict. Single applicants are often limited to having no more than $2,000 in countable assets, and specific income limits apply. The Medicaid eligibility rules can vary from state to state. For example, in New York, the allowable resource level is $32,396 in 2025.
Without proper planning, individuals may be forced to spend a significant portion of their wealth to qualify. Fortunately, several strategies are available to help protect assets while navigating the Medicaid qualification process.
Spousal Transfers and Spousal Refusal
Transferring assets to a spouse is one way to protect and preserve wealth. For married couples, Medicaid laws include spousal impoverishment protections that allow the “community spouse” (the one not seeking care) to keep a portion of the couple’s assets and income. This is known as the Community Spouse Resource Allowance (CSRA).
Additionally, certain states (such as New York) allow for spousal refusal, a strategy where the community spouse legally declines to use their assets to pay for the institutionalized spouse’s care. Though this approach may result in Medicaid seeking recovery later, it can expedite the qualification process for the spouse requiring care.
Gifting Programs
Gifting assets to loved ones can help reduce countable resources, but it must be done with careful planning. Medicaid enforces a “five-year look-back period,” which reviews financial transactions to identify gifts or transfers made at less than fair market value. Violations during this period may result in penalties and delayed eligibility. Certain Medicaid programs, such as the New York State Medicaid home care program, do not have a transfer penalty assessed.
To strategically gift assets, consider transfers that are exempt from penalties, such as those to a disabled child or certain home transfers. Planning is critical to ensure compliance with Medicaid rules.
Medicaid Asset Protection Trust (MAPT)
The Medicaid Asset Protection Trust (MAPT) is a highly effective tool in Medicaid planning. This irrevocable trust allows individuals to transfer assets from their name, shielding them from Medicaid’s countable resource limits.
To comply with Medicaid regulations, a MAPT must be established at least five years before applying for long-term care benefits. Once assets are placed into the trust, they are no longer considered part of the individual’s estate for Medicaid purposes, yet they remain available for beneficiaries upon the individual’s passing.
Crisis Planning for Medicaid
If immediate care is needed, it’s still possible to protect assets through “crisis Medicaid planning.” This may involve making exempt transfers, restructuring resources through annuities, or establishing caregiver agreements to compensate family members who provide care. While options are more limited in urgent situations, consulting an elder law attorney can yield significant savings.
Why Seek Professional Guidance?
Medicaid regulations are complex and differ from state to state. Mistakes in asset transfer or trust creation can lead to costly penalties or disqualification. Working with an experienced elder law attorney is a key part of effective planning. Attorneys like Vincent J. Russo and his team at the Russo Law Group concentrate on Medicaid planning and understand the nuances of protecting assets while securing benefits. Russo notes, “Families can preserve their hard-earned assets, but navigating the process requires careful and thoughtful planning.”
Taking the Next Steps
The path to Medicaid eligibility doesn’t have to mean losing everything you’ve worked hard to build. Tools like spousal transfers, gifting programs, and Medicaid Asset Protection Trusts allow you to control your financial future, even while addressing long-term care needs.
Don’t wait until a crisis makes decisions more complicated. Speak with a qualified elder law attorney to evaluate your unique situation and craft a plan that meets your family’s needs. By acting now, you can find the peace of mind that comes with knowing your assets and loved ones are secure.
