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How to Protect Assets from Medicaid Recovery

Asset Protection Lawyer

It is an unfortunate fact of life. When you or a loved one reaches the stage of life, where you may need long-term care or a nursing home, Medicaid can help to cover the cost, as most of us will run out of the money needed to pay for these facilities. However, when the person dies, Medicaid will go after any assets they have in order to pay back what was paid out for the person, in a process called the Medicaid Estate Recovery plan.

This can lead to dire situations for spouses or families who may find themselves having just lost a loved one, and dealing with Medicaid attempting to take the house in order to pay off the bill. While it sounds like a terrible situation, there are ways to avoid it. Planning, done in advance, can ensure that your home and property is protected against Medicaid. 

Life Estates

A life estate is one way to go about protecting your home from Medicaid, when the times come to make such decisions. A life estate is a form of joint-ownership of a property, between two or more people, and at different times. Essentially, the owner of the property has control of it until their death, at which time the co-owner takes control of the property. Be aware that this arrangement can trigger a five-year Medicaid ineligibility period. It can be avoided if the person purchasing the life estate lives in the home for at least a one-year period, and pays a fair amount of the life estate. 


Transferring your property to an irrevocable trust can also protect it from Medicaid estate recovery. While this can be more flexible than a life estate, it is also more complicated. For instance, once a property is placed into an irrevocable trust, it cannot be taken out. It can be sold, but any profits made from the property or house must be kept in the trust. This enables the seller to protect more of the value of the house, if it ends up being sold. 

Some people decide to “deed” their home to their children. This can also trigger the five-year penalty lookback period, and leave you unable to pay for care. Using a trust is a better way to do it, in terms of risk avoidance. 

Advanced Planning

Planning in advance is critically important, especially when you’d like to keep your home or assets in the family. Advanced planning will also allow you to avoid Medicaid’s five-year lookback, and avoid the penalty involved with that. It is best to try to plan five years ahead of any illnesses or health trouble you or your spouse may encounter. Of course, this is easier said than done, but the earlier the better. 

Planning well in advance of any potential issues also gives you more options in terms of how to set up your estate planning to avoid things like the Medicaid Estate Recovery program. These are not the most pleasant things to think about, but putting in the effort now will pay off in the end. 

Consult an Asset Protection Lawyer

These are also plans you should not come up with on your own. An experienced asset protection lawyer at The Mattar Firm, who has dealt with Medicaid and the surrounding issues, is best suited to look at your individual circumstances, and work with you to develop a plan.

An experienced asset protection lawyer can also help put you at ease if you are worried about paying for long-term care, and keeping your assets. There are options available to your specific circumstance, and The Mattar Firm will work with you for the best possible outcome for you and your family. 

Contact The Mattar Firm

At The Mattar Firm, our asset protection lawyers are here to help you with your Medicaid needs. Contact us today at 239-222-2222.


We are dedicated to making a difference in your life and that of your family.