Avoid Losing Everything to Nursing Home Costs: Medicaid Strategies That Work | Repair The Roof Podcast

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Crisis Medicaid planning is essential for those facing long-term care costs, helping individuals and couples protect their assets while maintaining Medicaid eligibility. Without proper planning, families may be forced to spend down their savings before qualifying for assistance.

Ted Gudorf explains key strategies, including asset restructuring, spousal protections, and legal exemptions that can preserve wealth while ensuring access to necessary care. By understanding Medicaid’s complex eligibility rules and utilizing proven planning techniques, families can avoid unnecessary financial hardship and secure a stable future.

Key Topics

  • Understanding Living Trusts and Tax Implications (00:00)
  • When Living Trusts Can Help Save on Taxes (02:53)
  • Real-Life Examples of Living Trust Benefits (05:47)
  • Strategic Use of Living Trusts in Estate Planning (09:10)

Crisis Medicaid Planning: How to Protect Your Assets When a Loved One Enters a Nursing Home

Facing a Nursing Home Crisis? You May Still Be Able to Protect Your Assets

The phone rings. It’s a concerned son or daughter saying, “I just dropped my mom off at the nursing home. Is there any way to save some of her money?”

The good news? The answer is yes. Even if no prior planning has been done, crisis Medicaid planning can still help preserve significant assets. Many people believe that once a loved one enters a nursing home, all their savings must be spent on care before Medicaid kicks in. However, with the right legal strategy, families can still protect a substantial portion of their wealth.

Key Takeaways

  • Crisis Medicaid planning can protect a significant portion of assets.
  • Medicaid eligibility requires strict asset limits: $2,000 for singles, $3,000 for married couples needing care.
  • Legal strategies can help preserve about 50% of remaining assets for singles and 100% for married couples with a healthy spouse.
  • Customized plans often involve creating specialized trusts for asset protection.
  • The timing of asset transfers is crucial due to Medicaid's five-year look-back period.
  • Crisis planning is about ensuring access to quality care while maintaining financial stability.
  • Asset protection strategies can convert countable assets into exempt assets.
  • Families should not rely solely on nursing homes for Medicaid advice.
  • It's never too late to implement effective asset protection strategies.

At Gudorf Law Group, we specialize in Medicaid crisis planning, helping individuals and families navigate this difficult process. Let’s break down how it works and what options are available to protect your financial future.

Understanding Medicaid’s Asset Limits

Medicaid has strict asset limits that determine eligibility for long-term care assistance. Here’s how it works:

  • For a single individual, assets must not exceed $2,000 to qualify for Medicaid.
  • For a married couple where both spouses need care, the limit is $3,000.
  • For a married couple where one spouse remains at home (the "community spouse"), the rules are different:

⦾ The spouse at home can keep the house, a car, and approximately $130,000
⦾ Any additional assets must be "spent down" to meet Medicaid’s eligibility requirements.

These limits can cause major financial strain if not properly planned for. However, even if you find yourself in a crisis situation, legal strategies exist to protect assets from being entirely consumed by nursing home costs.

How Crisis Medicaid Planning Works

For those who haven’t done prior planning and suddenly need Medicaid, attorneys use a strategy called “spend down” to legally reposition assets. The goal is to reduce countable assets in a way that maximizes preservation while still qualifying for Medicaid.

One of the most common crisis planning methods is called the Half-Loaf Plan, which typically works as follows:

  1. Identify all assets and income – A full financial inventory is taken to understand the person’s resources.
  2. Transfer roughly half of the assets into a trust – This protects a portion of the assets from Medicaid eligibility calculations.
  3. Use the other half to pay for care – The remaining assets are often used to purchase a Medicaid-compliant annuity or placed into a pooled trust to cover nursing home expenses during the Medicaid penalty period.
  4. Apply for Medicaid once eligibility is met – By strategically structuring assets, Medicaid approval can be achieved while preserving wealth for the family.

How Much Can Be Saved?

The exact amount that can be protected depends on several factors, including:

  • The cost of care at the nursing home.
  • The individual’s income level.
  • The state-specific Medicaid rules that apply.

Generally speaking:

  • For a single individual, crisis Medicaid planning can protect about 50% of remaining assets.
  • For a married couple, if one spouse is in a nursing home and the other remains at home, 100% of the assets can often be protected.

This means that instead of spending down an entire life’s savings on nursing home care, families can still retain a significant portion of their assets while ensuring their loved one receives the care they need.

Why Nursing Homes Won’t Tell You About Medicaid Planning

Many families rely on nursing homes to provide guidance about Medicaid. Unfortunately, most nursing homes do not inform residents or their families that legal strategies exist to protect assets. Instead, they often say that all money must be spent on care before Medicaid will step in.

The reality is different. A qualified elder law attorney can create a customized crisis Medicaid plan that:

  • Ensures you meet Medicaid eligibility requirements.
  • Protects as many assets as possible.
  • Handles the Medicaid application process to ensure approval.

At Gudorf Law Group, we don’t just offer advice—we implement the plan, file the Medicaid application, and ensure our clients qualify without unnecessary financial loss.

What Should You Do Next?

If you or a loved one is in a nursing home or will be soon, don’t assume that all assets must be spent on care. Medicaid crisis planning can still help you preserve your hard-earned money.

Call Gudorf Law Group today to schedule a consultation. Let’s discuss your situation and create a plan to protect your financial future while ensuring quality care for your loved one.

Even in a crisis, there are legal strategies available to safeguard what you’ve worked for. Don’t wait until it’s too late—take action today.

*This blog post is based on the insights shared by Gudorf Financial Group. For personalized advice tailored to your unique circumstances, always consult a financial, legal, or tax professional.*

Transcript: Prefer to Read — Click to Open

Hi there, this is Ted Gudorf from Gudorf Law Group. Today I want to talk to you about crisis Medicaid planning. Often times here at Gudorf Law Group the phone will ring, we will answer it. It will be a son or daughter that says, I just dropped my mom off at the nursing home. Is there any chance we can save some money by doing Medicaid planning? And believe it or not, the answer is yes. We can do what is called crisis Medicaid planning. How does that work? Well,

For somebody who has not done any pre-planning and is in crisis, the overall goal will be to try to save as much money as possible. Typically, for an unmarried person, we can save 50 % of what a client’s are that are remaining, even though they’re in a nursing home. For a married person with a healthy spouse, we can typically save 100 % of the remaining assets. How does it work?

Well Medicaid says that in order to be eligible, if you’re a single person, you’re not allowed to have more than $2,000 worth of assets. Rules are different if you’re a married couple and both of you are in a facility and want to go on Medicaid, you can’t have more than $3,000. On the other hand, if we have a married couple and one of you need care and there is a spouse at home that we call the community spouse, the spouse at home is allowed to keep the house, a car,

and roughly $130,000 plus all of their income. And to the extent that the spouse at home has more than that, they have to, quote, spend down and the issue will become how do we spend down. So fundamental rules are you’re not allowed to have more than $2,000 in your name, but the law will strike that.

But the law will allow a client in order to go on Medicaid to do Medicaid planning. And how does that typically work? Well, elder law attorneys have a phrase called spend down. That simply means we’re going to do what they term a half loaf plan. So what Medicaid will allow us to do is to identify all of the client’s assets as well as their income and develop a plan to create a trust of one type or another and transfer roughly half of a person’s assets

Ted (06:37.29)

into that trust. Then we take the other half of the assets and typically will either purchase a Medicaid qualified annuity or put money in a pooled trust account one way or the other. We will utilize those funds to pay for the nursing home bill in an effort to protect the other half that we’ve put in the trust. So that half loaf type planning will generally result in saving roughly 50 percent of a person’s assets.

The exact amount of assets that can be preserved or protected will depend in part on the amount of income the person has as well as the cost of care at the facility. The bottom line is that if you find yourself to be in crisis or have a loved one who is in crisis and is burning up their money, don’t rely upon the nursing home to tell you that you can do Medicaid crisis planning.

and save half of what you have left. In fact, the sad truth is, what most of our local nursing homes are telling people is that you can’t do anything other than give them all of your money. And after all of that money’s gone, then they, rather than the elder law attorney, will apply for Medicaid for you. But here at Gudorf Law Group, we will help you create the plan. We’ll devise the plan and we will implement it.

We’ll even file the Medicaid application for you and make sure that you qualify. So Medicaid crisis planning is difficult, complicated, but we’re here to help and we can help you put together a plan. Feel free to give Gudorf Law Group a call. Thank you for being with us today. I hope you found this useful.

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