This article gives you a quick summary of the many ways assets can be protected from Medicaid spend down. Very few attorneys know this information and that includes those who practice “Elder Law.”
Before we cover asset protection strategies we first recognize the 2026 Medicaid basic allowances as stated in Bridges Eligibility Manual item 402. (BEM) The applicant can have $9,950 countable assets. If the applicant owns a home and intends to return home the homestead exempt up to $752,000 equity. We note that the term homestead includes attached land. For example if the homestead is worth $1,000,000 and the applicant has a mortgage of $300,000 it is exempt. “Countable Assets” are all assets own by both the applicant and spouse. They include checking, savings, and investment accounts and IRAs. If the spouse lives in homestead there is no asset limit. We recommend the Institutional Spouse transfer ownership to the CS for the reasons of eligibility, ease of management of property and avoidance of Medicaid Estate Recovery.
The “community spouse resource allowance”ranges from a minimum $32,532 to maximum of $162,660. The applicant will be eligible when all countable assets except community spouse resource allowance is spent down to $9,950. The asset protection methods are:
- Establishment and funding of a Spouse Sole Benefit Trust. The trust can be established and funded after the applicant enters the nursing home.
- prepayment of funeral and burials space items for the applicant, spouse and family members;
- Purchase of exempt property;
- Payment for home repairs and improvements;
- Purchase an annuity for Community Spouse;
- Court Order of Support to increase spouse assets allowances above the Communit Spouse Resource Allowance.
- A prepaid community spouse personal service contract
We cover these asset protection on other pages in our website. Just take a look at our “Resource” listing. The link may be found on our home page.
If you need a referral to one of the best Elder Law attorneys in Michigan just give us a call at 248-356-3500. If Dawn does not pick up just leave a message. She will get back to you within 24 hours.
All the best to you
Jim