Question: Can Medicaid Seize Assets?

Can Medicaid Take Your Assets?

Assets You Can Have and Still Qualify for Medicaid.

Medicaid is a joint federal and state program that helps people with limited income and few assets cover health care costs.

Generally, though, the government considers certain assets (usually up to a specific allowable amount) to be exempt.

How far back does Medicaid check for assets?

That’s great – but beware the look back period. When you apply for Medicaid, any gifts or transfers of assets made within five years (60 months) of the date of application are subject to penalties. Any gifts or transfers of assets made greater than 5 years of the date of application are not subject to penalties.

What assets are exempt from Medicaid?

Exempt assets include one’s primary home, given the individual applying for Medicaid, or their spouse, lives in it. Some states allow “intent” to return home to qualify the home as an exempt asset. There is also a home equity value limit for exemption purposes.

Can a nursing home take your assets?

This means that, in most cases, a nursing home resident can keep their residence and still qualify for Medicaid to pay their nursing home expenses. The nursing home doesn’t (and cannot) take the home. But neither the government nor the nursing home will take your home as long as you live.

Can Medicaid take my inheritance?

For most people, receiving an inheritance is something good, but for a nursing home resident on Medicaid, an inheritance may not be such welcome news. Medicaid has strict income and resource limits, so an inheritance can make a Medicaid recipient ineligible for Medicaid.

Does Medicaid check bank accounts?

Although Medicaid is a federal program, the income and asset limits are set by each state, so you should check with your state’s agency when you’re ready to apply. Assets are defined as money held in a savings or checking account, plus any investment or retirement accounts.

What is Medicaid look back rule?

The general rule is that if a senior applies for Medicaid, is deemed eligible but is found to have gifted assets within the five-year look-back period, then they will be disqualified from receiving benefits for a certain number of months. This is referred to as the Medicaid penalty period.

What does the 5 year look back mean?

The Medicaid case worker will review all transactions for the prior five years to determine whether any assets (money, stocks, property, etc…) were given to any individual or entity for less than fair-market value (also called a “gift”). This review by the Medicaid case worker is referred to as the “look back period.”

How do I get rid of my assets for Medicaid?

Following are examples of what a Medicaid applicant may be able to spend money on:

  • Prepay funeral expenses.
  • Pay off a mortgage, car loan, or credit card debts.
  • Make repairs to a home.
  • Replace an old automobile.
  • Update your personal effects.
  • Medical care and equipment.
  • Pay for more care at home.
  • Buy a new home.

How much money can a Medicaid recipient keep?

The $10,000 annual “limit” on gifts to one person (now $14,000 in 2016) is a rule of tax law and has no relation to Medicaid law. There is no legal limit on the amount of money a person can give away. A person can give away a million dollars if she wants.

Does Medicaid have to be paid back after death?

Medicaid will often pay for nursing home care even for those who have assets that could be used to pay for care. But after the person’s death, the state Medicaid program can try to collect medical costs from the deceased person’s estate. This is called “estate recovery.”

Can Medicaid Take Your 401k?

Evaluate your 401k or IRA carefully. Medicaid will count your IRA or 401k as an available source of funds to pay for your care, unless it is in payout status. If it’s not in payout status, it may be beneficial to take the cash out and pay the income tax on it, and then transfer it to a trust.

How can I protect my assets from nursing home costs?


  1. Use private wealth. If you have significant financial resources, you may be able to afford to pay for nursing home services or private in-home services out of pocket.
  2. Rely on family.
  3. Pay with private insurance or Medicare.
  4. Acquire long-term health insurance.
  5. Qualify for Medicaid.

How do you protect your assets?

Here are the eight critical strategies to consider as part of your personal asset protection plan:

  • Choose the right business entity.
  • Maintain your corporate veil.
  • Use proper contracts and procedures.
  • Purchase appropriate business insurance.
  • Obtain umbrella insurance.
  • Place certain assets in your spouse’s name.

Does a Irrevocable Trust protect assets from nursing home?

An Irrevocable Medicaid Asset Protection Trust protects assets from the costs of long term care due to a long-term nursing home or assisted living stay. So, a properly created trust that protects assets from a nursing home results in the trust creator losing control over the assets placed in trust.