How to Protect your Assets from Medicaid

For elderly adults who are looking to enter a nursing home or long-term care facility, the jointly funded state and federal Medicaid program can provide significant financial relief.

For those who are 65 and older, it is important to understand the requirements of qualifying for Medicaid and how individuals can potentially shield their assets. An experienced elder law attorney can work with you or your loved one throughout the Medicaid application process and help provide the most protection possible.

In order to qualify for Medicaid, an individual must meet their state’s financial requirements. For instance, in New Jersey, an individual must have $2,000 or less in total countable assets. For Medicaid qualified individuals, the program sends payment directly to health care providers. In New Jersey, Medicaid covers the cost of nursing homes, assisted living facilities, and home care. However, in Pennsylvania, assisted living care is not covered by the program.

Maintain Assets and Qualify for Medicaid 

For married couples, the assets of both the applying spouse and the non-applying spouse are treated as a joint asset pool for Medicaid eligibility purposes. In order to help assure eligibility in New Jersey, it is necessary to divest the spouse applying for Medicaid of all but $2,000 of an individual’s assets. The non-applying spouse may retain a larger share of the assets (an amount set by Medicaid subject to change annually) as well as income.

It is also necessary to remove the Medicaid applicant’s name from homeownership. By transferring the ownership of assets, a Medicaid applicant’s spouse may receive the benefits of the program and continue to protect his or her assets from potential Medicaid liens on the marital home.

Medicaid planning can protect a family’s assets by taking steps to spend down their assets in order to qualify for the program. In New Jersey, an applicant preparing to enter a nursing home could spend down assets on things such as making repairs to the marital home, adding a ramp or other disability-related alterations to the home, purchasing a new or newer car, or even purchasing an irrevocable prepaid funeral trust. By taking these steps, an individual can simultaneously qualify for Medicaid and improve his or her quality of life. 

If you or a loved one are considering applying for Medicaid, consult with one of our experienced elder law attorneys by contacting our office at 856.782.8450 or [email protected].