I’ll keep it short. “Medicaid Planning” is sold all over the web. When done poorly it Harms the senior client. Here’s a brief description of a very complicated problem.
Some 20 years ago “estate planners” found they could sell “Medicaid Planning” as a way to “protect your assets.” Well, they accomplished “asset protection” by taking away senior client protection. The pitch, still out there, calls for a senior, married or single, to put their “assets” into an irrevocable trust, where they will have no ability to withdraw any asset – home, savings, vehicles. Thus they are assured if they need Medicaid long term care services they will easily qualify. I call it spend Big Money on “Medicaid Planning” and in 5 years you can go into a nursing home with your assets protected back home. See the problem? Who wants to be in a nursing home in five years!
This is not a hypothetical problem. In January 2025 an attorney posted on the elder law listserv about a senior who set up one of these asset protection trusts and then some years later had to move out of the home into assisted living. His problem was that while Medicaid will pay full nursing home costs, it will not pay for “room and board” in an assisted living. Those two items are The main cost of assisted living. Medicaid will pay for additional health related services such as bathing or toileting assistance, through the “Medicaid Waiver” program, which is a Medicaid program with the asset limits.
The senior could not pay the monthly rent. He had no savings. Those were tied up in the asset protection trust. So the trustee started dispensing money to his son or daughter who then used the money to pay the assisted living bill. It all blew up when he applied for Medicaid Waiver assistance. They found out where the money was coming from and so the “asset protection trust” was deemed to be an available asset. Application denied due to excess assets. As of writing it is not resolved.
So there it is. This senior spend thousands of dollars for an asset protection trust. When he did not want to go into a nursing home and instead needed his money to pay for an assisted living apartment, he didn’t have it. So money came out of the trust and the Medicaid department denied the application.
Moral: Don’t spend your estate planning money on a Medicaid asset protection trust. Save your money for YOUR needs. Protect YOUR Independence. Then when you really need Medicaid assistance (which you have already paid for with your decades of tax paying) then contact a reputable elder law attorney and at that time engage “Crisis Medicaid Planning.” You will assure your maximum independence, with Medicaid long term care services and supports in your home or your community and Not in an nursing home or institution because you have no choice.
Keep your money. Keep your independence. When the crisis of long term care strikes, then hire a reputable elder law attorney for “Crisis Medicaid Planning” to have your application for benefits come quickly And save assets for later in life when you may be able to leave the nursing home or those you love after you pass away.
Call us at 248-356-3500 for a referral.
Jim
