Can I Restructure Assets to Qualify for Medicaid?
Many people mistakenly believe that Medicaid is exclusively for those with low incomes. However, with strategic estate planning and guidance from a Medicaid planning attorney, most people, except the wealthiest, can often access program benefits.
Unlike Medicare, Medicaid operates differently across states. Each state establishes its own eligibility requirements, covered services, and payment structures within federal guidelines. Importantly, Medicaid covers long-term nursing home care and home health services that Medicare does not.
Income-Based Planning Strategies
For individuals whose income exceeds their state’s Medicaid threshold, two primary trust structures can help maintain eligibility:
Qualified Income Trusts (QITs)
Also called “Miller trusts,” these irrevocable trusts hold your income under trustee control. Funds within the trust can only be used for personal needs allowances, spousal allowances (if applicable), and medical expenses including health insurance premiums. Since the trust legally owns these funds rather than you personally, they do not count toward Medicaid income limits.
Pooled Income Trusts
Similar to QITs, these irrevocable trusts accept surplus income to maintain Medicaid eligibility for those who qualify as disabled. A nonprofit charitable organization manages the trust and disburses monthly payments for beneficiary expenses. Any remaining funds at death support other disabled individuals in the program.
Asset Considerations
Beyond income limits, Medicaid includes an “asset test” that varies by state. Generally, your primary residence (up to a maximum value) is exempt if you currently live there or plan to return. Most states require other assets to be reduced to approximately $2,000 per individual ($4,000 for married couples) to qualify.
These specialized planning tools create legal pathways to Medicaid eligibility for those with too much income for assistance but insufficient wealth to cover escalating long-term care costs.
If you or a loved one needs help with Medicaid planning, do not hesitate to contact The Stegall Law Firm for a consultation.
