My mom needs to go on Medicaid and has a substantial sum of money in her bank account. What can we legally spend this m...Read more
Spending Down Assets to Qualify for Medicaid
- December 22nd, 2017
Medicaid has strict asset rules that compel many applicants to "spend down" their assets before they can qualify for coverage. It is important to know what you can spend your money on without endangering Medicaid eligibility.
Local Elder Law Attorneys in Ashburn, VA
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Hale Ball Carlson Baumgartner Murphy PLC
Attorney Samantha Simmons Fredieu is an associate at Hale Ball. Ms. Fredieu graduated magna cum laude from Vermont Law School where she was the symposium editor on the Vermont Law Review, a production editor on the Vermont Journal of Environmental Law, and a member of the Moot Court Advisory Board. She has clerked for...
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...
In order to be eligible for Medicaid, applicants must have no more than $2,000 in "countable" assets (the dollar figure may be slightly more, depending on the state). In addition, Medicaid also has strict asset transfer rules. If an applicant transfers assets for less than market value, the applicant will be ineligible for Medicaid for a period of time. Applicants for Medicaid and their spouses may protect savings by spending them on non-countable assets.
A Medicaid applicant can spend down money on anything that would benefit the applicant. Following are examples of what a Medicaid applicant may be able to spend money on:
- Prepay funeral expenses. A prepaid or pre-need funeral contract allows you to purchase funeral goods and services before you die.
- Pay off a mortgage, car loan, or credit card debts. You can pay off the debt fully or make partial payment.
- Make repairs to a home. Fix the roof, make the house handicapped accessible, buy new carpet, etc.
- Replace an old automobile. This can be useful for the healthy spouse.
- Update your personal effects. Buy household goods or personal comfort objects. Buy a new wardrobe, electronics, or furniture.
- Medical care and equipment. Purchase items that aren't covered by Medicare or Medicaid. See a dentist or get your eyes checked if those items aren't covered by your insurance.
- Pay for more care at home. Make sure you get any caregiving agreements in writing, especially if family members are providing the care.
- Buy a new home. A home can be an exempt asset, so it may be possible to purchase a new home.
In the case of married couples, it is often important that any spend-down steps be taken only after the unhealthy spouse moves to a nursing home if this would affect the amount of money the community spouse would get to keep, called the community spouse's resource allowance.
Each state has different requirements for spend down. Before making any spend down plans, consult with your elder law attorney.
Last Modified: 12/22/2017