Note: you should not spend down on items without first consulting an elder law attorney. Prepayment of a funeral at a funeral home is an exception.
First a simple rule: you cannot give “assets” to qualify for Medicaid within the last five years.
You can pay for all of your personal needs.
You cannot purchase a house. Only homes owned before going into a nursing home are exempt.
You can purchase “Exempt Assets.” These include: a vehicle; property for your home such as new flooring, appliances and so on.
You can pay children or other person who performs personal services for you. See our page “Can I Be Paid for Helping My Parents? – Michigan Medicaid BEM 405” here
You can pay for personal needs of every sort.
You can improve your home for your needs. For example, you may need a ramp to the home or handicap accessible showr.
You can transfer money or other countable assets in trust for a disabled child or other disabled person.
You can a funeral and burial for yourself.
You purchase “burial space items.” These are such things as a casket, vault, cremation niche and such.