What Are Some Tips for Protecting Assets From Medicaid?


Quick Answer

Individuals can protect assets from Medicaid by drafting a life estate for their real estate, which names an individual as the life tenant and names someone he trusts as the remainder man, explains LegalZoom. The state cannot make a claim against the property if another person owns it.

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Full Answer

The problem with life estate transfers is that the state can go after the property if the individual retaining a life estate needs nursing home care within a five-year window after the property was transferred, says LegalZoom.

Another way to protect assets is to place liquid assets into an annuity. Some states do not count periodic payouts from annuities when they determine an individual's eligibility for Medicaid. Assets are transferred into an annuity, and the individual can qualify for nursing home care covered by Medicaid without having to spend down his assets. Individuals who live in states that do count annuity payouts when determining Medicaid eligibility can still transfer assets into an annuity, but they cannot use Medicaid's services for a specific period of time following the transfer, says LegalZoom. Another move to protect assets is to shelter money through an irrevocable trust. An irrevocable trust is exempt from nursing home costs.

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