One planning strategy for preserving assets involves the use of trusts. When assets are placed in a qualifying irrevocable income-only trust, those assets are no longer owned by the person who created the trust, and five years after the transfer, those assets will not prevent that person from qualifying for Medicaid. The transfer of assets into this type of trust must take place at least five years before you apply for Medicaid long term care benefits.
We strongly recommend that no one should attempt Medicaid planning without the guidance of an experienced elder law attorney. Your wish for asset protection must be tailored to your circumstances and goals, comply with Medicaid and public benefit rules and laws.
Medicaid has strict rules about when and how assets can be transferred. For example, asset transfers done in the five years before you apply for Medicaid benefits to pay for a nursing home may cause you to be ineligible for benefits. Medicaid planning poses unique challenges to every family and requires individual solutions.