The Facts

Assets in a revocable living trust are not protected from Medicaid liens and attachments and must be used to pay for the costs of long-term care.

However, if you are married, your home is exempt and Medicaid cannot require its sale to pay for the cost of care unless your equity in the home exceeds $500,000.   If you are single and must move to a nursing home, before you are able to qualify for Medicaid your home must be sold and the proceeds of the sale must be used to pay for the medical bills before you are eligibe for Medicaid benefits.  If you transfer your home to your children, not only will it result in immediate ineligibility for Medicaid, but it could also:

     *Trigger a gift tax
     *Result in your child's spouse (the in-laws) inheriting your home

Giving your assets away means losing control. It's not safe even if you "trust" who you give it to. If that person divorces, goes bankrupt or is sued, all of the money you transferred is at risk. There are asset protection trusts that permit you to keep 100% control of your assets without the risk of losing them if long-term care is needed.

Nor must you necessarily have to wait 60 months to qualify for Medicaid. Eligibility is calculated on a case-by-case basis. It is possible to have asset and still qualify immediately. Get professional advice and learn the facts.

It is never too late to protect your assets even if  you are already in a nursing home. 

A nursing home or hospital that offers to file a Medicaid application for you has no obligation (and often can't) advise you on how to protect your assets.

Applying for Medicaid prior to qualification could result in being disqualified for a longer period of time than you otherwise would have been (it's not limited to 60 months).

Make sure that the law firm you engage to assist you with your Medicaid planning has experience in the myriad issues that govern this bureaucracy; it is preferable to seek the advice of a firm that has dedicated it practice to Elder Law issues.  After all, would you  ask your family doctor to perform complicated brain surgery?  

Always consider your option to purchase long-term care insurance. Often, an annual premium for a couple is less than the cost of one month in a nursing home and certainly less than 24 hour care in your own home.  In fact,   with proper planing, long term care insurance may be the only way you can afford to remain in your home sure your need daily nursing care.