Navigating all the little rules and requirements for Medicaid can be frustrating. The one that can cause the most stress for many people, however, is the asset limit.
As the American Council on Aging explains, each state can set an asset threshold for Medicaid eligibility. Basically, if your assets are worth above that amount, you are not eligible to receive Medicaid. Solving this dilemma is at the heart of asset preservation.
How asset preservation helps
The concept of asset preservation is fairly simple. It is using legal strategies to help an individual get below the Medicaid asset limit, while trying to hold on to as many assets as possible. For example, many people worry about losing their home. Using effective asset preservation strategies, some people are able to keep their house and continue living there.
One frequent strategy is to use a Medicaid Asset Protection Trust. You may be able to put certain assets in this trust, allowing yourself and others access. But legally, you are no longer considered the owner of those assets.
Other potential strategies include:
- Gift giving
- Alternate irrevocable trusts
It’s important to plan ahead
With this type of Medicaid planning, the sooner you get started, the better your chances of holding on to more assets. Smart strategizing can help you become Medicaid eligible – meaning potentially able to receive help paying for in-home, assisted living or nursing home care – without having to quickly and dramatically spend down.
If you’re considering long-term care needs for yourself or a loved one, and need help navigating the complex world of Medicaid planning, consider reaching out to an elder law attorney. They can review your situation, listen to your goals and help come up with an effective plan.