The fear of losing everything you have worked for to pay for long-term care is real, and it is one of the most common concerns families bring to our office. The good news is that Pennsylvania law provides several legitimate strategies to protect your home and savings while still qualifying for Medicaid benefits.
Planning ahead makes all the difference between preserving your assets and watching them disappear. Contact Kreisher Marshall & Associates, LLC to speak with an elder law attorney who can walk you through your options.
Irrevocable Medicaid Asset Protection Trusts (MAPTs)
One of the most effective tools for shielding your home and savings is an irrevocable Medicaid asset protection trust. Once assets are placed inside the trust and the look-back period passes, they are no longer counted toward Medicaid eligibility:
- Your home can be transferred into the trust while you continue living there
- Savings and investments held in the trust are protected from spend-down requirements
- The trust is managed by a trustee you select
- Assets inside the trust are shielded from Medicaid estate recovery after your passing
- You retain the right to receive income generated by trust assets
The 5-Year Look-Back Period
Medicaid reviews all asset transfers made within five years of your application date. Any transfer made during that window without receiving fair market value in return can trigger a penalty period during which you are ineligible for benefits. Starting the Medicaid planning process well before care is needed gives your transfers time to clear the look-back window completely.
Life Estate with Retained Powers (LERP)
A life estate with retained powers allows you to transfer ownership of your home to a beneficiary while keeping the right to live there and even sell the property during your lifetime. Pennsylvania recognizes this tool to remove the home from your estate for Medicaid recovery purposes while still giving you control over the property as long as you need it.
Spousal Protections
When one spouse needs long-term care, federal law protects the healthy spouse. Under 42 U.S.C. § 1396r-5, the community spouse can keep a portion of the couple’s assets and a minimum monthly income to cover living expenses.
Spending Down Countable Assets
If your assets exceed Medicaid’s eligibility limits, spending them down strategically on exempt purchases is a legitimate way to qualify without simply wasting your money. Pennsylvania allows you to convert countable resources into non-countable ones through approved methods:
- Paying off your mortgage or making home improvements
- Purchasing a prepaid burial plan
- Paying down outstanding debts
- Buying a new vehicle to replace an older one
- Covering medical expenses not reimbursed by insurance
Prepaying Funeral Expenses
Prepaid irrevocable funeral contracts are fully exempt from Medicaid’s asset calculations in Pennsylvania. Setting aside funds for burial and funeral costs removes that money from your countable resources while giving your family peace of mind that those expenses are already handled.
Contact a Pennsylvania Medicaid Planning Attorney
Are you concerned that long-term care costs could consume the home and savings you spent a lifetime building? Call Kreisher Marshall & Associates, LLC at 814-458-6294 or contact us online to schedule a consultation with an experienced Pennsylvania Medicaid planning lawyer who will help you develop a strategy tailored to your family’s needs and financial goals.