A good estate plan considers not only what would happen if you die but also how to protect your assets during your life. It can be confusing to figure out how to protect your savings as you prepare for the possibility of needing long-term care later in life. Here are three key things to ask your attorney about qualifying government benefits that assist with the costs of medical care, such as Medicaid, in your estate planning.

1.   Income and Asset Limits.  Successful applications for Medicaid long-term-care benefits/assistance must fall within a monthly income limit. If the applicant’s income is above the limit, they may need to pay for some services out of pocket. There are special rules when transferring property before applying for Medicaid. Any gifts or assets transferred within five years before applying for benefits are counted as assets that might prevent an applicant from being eligible for benefits. There are some exceptions to this five-year “look back” period, which may be worth discussing with a qualified estate planning attorney.
2. Exempt Assets/Keeping Your Home.  Your primary residence is exempt from being counted against you for Medicaid eligibility purposes, as long as the value of your home does not exceed the current limit, and either you or your spouse are still living in your home. If you are not married and own a home or own real estate that is not your home (such as investment, rental or business property), additional steps may need to be taken to make sure your assets do not disqualify you from Medicaid assistance.
3. How to Transfer Assets.  Assets can be transferred between spouses without limitation during the process of applying for Medicaid benefits, but Medicaid takes into account the assets of both spouses to determine eligibility for benefits. A spouse’s assets cannot exceed a set limit in order for one spouse to be eligible for Medicaid long-term care benefits. If a couple’s assets exceed the allowable limit, then the couple will need to decide whether to “spend down” those assets in order to be within the limits for Medicaid benefits, or make adjustments to how their assets are owned in order to gain  eligibility. Once an application for Medicaid is approved, there is no limitation on what assets a non-beneficiary spouse can have. A beneficiary still has a limit on their assets and cannot have more than a certain dollar-amount of countable assets while they are a Medicaid beneficiary.