Medicaid Asset Protection

27 Jun 2023 · 0 min

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In this segment, the speaker explains key Medicaid asset protection rules related to placing a home in an irrevocable trust. He notes that if the parents need long‑term care before the five‑year look‑back period ends, Medicaid may still consider the home a countable asset. If both parents are alive, the spouse who does not require care can retain lifetime occupancy of the home, though Medicaid may place a lien that is collected after death. Transferring the home to a child at below market value triggers a penalty, requiring the parents to privately pay for care until the penalty period expires.

Your parents put their home in an irrevocable trust and they don't make it the 5 years. They need long-term care before that 5 years is up. If they're both still alive, then the one that does not need care can live in the home for their lifetime. But Medicaid will probably put a lien against the home, which they will recover on after they die. If they put the home in the name of the child, as this question suggests, Medicaid would penalize them for transferring an asset at below market value, and they would have to private pay at the home until that penalty is gone.