Long-term care costs are rising—and they are projected to outpace inflation in the coming years. For many families, these costs present a serious threat to financial stability and accumulated wealth. While Medicare offers only limited, short-term coverage for nursing home care, Medicaid can serve as a crucial safety net. However, qualifying for Medicaid requires careful planning. In this guide, our Mechanicsburg Medicaid planning lawyers explain how to protect your assets while preparing for the potential costs of long-term care in Pennsylvania.
Why Medicaid Planning Matters for Asset Protection
The financial reality facing families across Pennsylvania is stark: long-term care is expensive. A single year in a skilled nursing facility often exceeds six figures in cost. For seniors who need care, Medicaid is frequently the only public program capable of providing long-term support. But Medicaid eligibility is not automatic. As explained by the Pennsylvania Department of Human Services (DHS), applicants must meet both medical and financial requirements. Without proactive planning, many people find themselves having to spend down their savings before qualifying—putting their homes, retirement funds, and other valuable assets at risk.
How to Protect Your Assets from Medicaid Spend-Down Requirements
To qualify for long-term care Medicaid in Pennsylvania, individuals must have limited income and countable assets. If your assets exceed the allowable limits, you may be required to spend down the excess before becoming eligible for coverage. Fortunately, there are lawful and effective strategies to reduce your countable assets without jeopardizing your future financial security. With the right approach, families can preserve significant portions of their estate while still maintaining eligibility for Medicaid benefits.
Understanding the Role of Trusts in Medicaid Asset Protection Planning
Trusts are among the most powerful tools available for Medicaid asset protection. In particular, irrevocable trusts can be used to remove assets from your personal ownership so that they are not counted toward Medicaid eligibility. When you transfer assets into an irrevocable trust, you give up direct control, and those assets are no longer considered available resources under Medicaid rules.
Proper timing is essential. Medicaid’s five-year look-back period applies to any asset transfers, including those into a trust. This means that effective planning should begin well before care is needed. While you cannot serve as trustee or access the principal of the trust, you may still benefit from any income it produces. When implemented correctly, an irrevocable trust can preserve your legacy, ensure Medicaid eligibility, and provide stability during your later years.
- Note: Additional asset protection strategies—such as converting countable assets into exempt resources—may also be appropriate depending on your situation.
Contact Our Pennsylvania Medicaid Planning Attorney Today
At Keystone Elder Law P.C., our Pennsylvania attorneys have deep experience in Medicaid planning and asset protection. We work closely with individuals and families to create strategies that safeguard their wealth while securing the care they need. If you have questions or concerns about how Medicaid might affect your assets, we are here to help. Contact us today for a fully confidential, no-obligation consultation. From our Mechanicsburg office, we proudly serve clients across the region.