Keep Medicaid out of your Estate

3 May 2023 · 1 min

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In this brief instructional video, Jerry Taylor outlines four primary methods to protect personal assets from Medicaid’s long‑term‑care recovery. He advises (1) making annual tax‑free gifts up to the $16,000 exclusion (and noting the $12 million lifetime exemption) at least five years before needing care; (2) establishing a life estate on a primary residence, retaining the right to live there while designating a remainderman, again with a five‑year lead time; (3) placing funds into an annuity, highlighting that some states such as Colorado may exclude annuity payouts from Medicaid eligibility calculations; and (4) creating an irrevocable trust to shield assets. The tone is instructional and supportive, with a neutral‑to‑cautiously optimistic sentiment toward the feasibility of these strategies.

Chapters

If you want to prevent the government from getting your money or your home should you need long-term care, I've got 4 ways to help you do that. The first way is to start giving money to your kids and your loved ones while you're still healthy. You can give up to $16,000 per year to as many people as you want without having to file a gift tax return. Above that amount, you have to file a return, but right now your lifetime gift tax exemption is about $12 million. This needs to be done at least 5 years before you need the care. Second, create a life estate. With a life estate, you have the right to live in the home until you die, and then it passes to your remainderman. That's whoever you designate to get the home. And if you create that 5 years before you need the care, the home will be exempt from Medicaid recovery. Three, put your money into an annuity. Some states like Colorado do not count annuity payouts against you for Medicaid eligibility. Check to see whether your Medicaid rules and regulations allow that. And four, an irrevocable trust.