But when you apply for Medicaid, you’re hit with a shock. Medicaid reviews her financials and penalizes her for that transfer. Now, she’s disqualified from benefits for two full years. For the next 24 months, you’re on the hook for her care costs—$7,500 a month. That’s $180,000 of your mother’s life savings, gone in an instant, all because of a simple oversight.
The 5-Year Look-Back is unforgiving. It doesn’t matter if your intentions were pure or if the transfer was made out of necessity—Medicaid doesn’t care. The rules are the rules, and breaking them, even unintentionally, can lead to financial ruin. That’s why families in this situation feel trapped, hopeless, and frustrated, watching their loved one’s assets vanish like smoke.
But here’s the good news: it doesn’t have to be this way. With the right plan in place, you can protect your loved one’s assets from being burned up by Medicaid penalties. A skilled Crisis Medicaid Planning attorney knows how to navigate the system, using legal tools like irrevocable trusts and proper asset transfers, so you don’t fall into this trap. The key is taking swift, decisive action.
Strict Income and Asset Limits: One Slip Could Disqualify You
Medicaid has strict limits on how much income and assets your loved one can have to qualify for benefits. If they own too much or earn too much, they’re disqualified—plain and simple. Most families don’t realize how low these limits are until they try to apply. Suddenly, that modest savings account or the family home becomes a barrier to getting the care your loved one desperately needs.
The truth is, without proper planning, Medicaid will force your loved one to spend down nearly everything they’ve worked a lifetime to build—leaving them with little more than $2,000 to their name.
Confusing Spend-Down Rules: A Risky Game That Could Cost You
Another common mistake families make is attempting to “spend down” assets to meet Medicaid’s limits. This can be a dangerous gamble. Without a clear plan, spending down can backfire, leaving your loved one vulnerable and financially exposed. Families often think they can simply reduce their assets by paying off debts or making large purchases, but Medicaid scrutinizes every move. One wrong step, and you could disqualify your loved one from the benefits they desperately need.
The risk of getting it wrong is high. But with the right legal guidance, you can avoid these traps, protect your loved one’s assets, and secure the care they need. The time to act is now—before these hidden barriers take everything away.
If you don’t understand these challenges, you will make mistakes and potentially prevent your loved one from getting the care they need while preserving the wealth they worked so hard to build. Don’t wait until it’s too late. A call to the right attorney today could save your family’s future.