What Strategies Help Protect Family Assets From Nursing Home Spend-Down?

If you’re worried about how nursing home costs could affect your family’s financial security, there are practical steps you can take now to protect yourself from nursing home spend-down. A Medicaid planning attorney in Columbia, MD, can help you protect what matters most while ensuring you’re prepared for the future.

Strategies to Protect Assets From Nursing Home Spend-Down

Medicaid Rules

Medicaid rules include some built-in safeguards that can prevent someone from losing everything when their spouse needs extended nursing home care. These are known as spousal impoverishment protections.

The community spouse, which is the spouse still living at home, can keep a set amount of the couple’s combined countable resources. If the community spouse’s own income falls below the minimum monthly maintenance needs allowance (which is around $2,600 to $4,000 for 2026), then a portion of their spouse’s income is protected from Medicaid and nursing home expenses and can be used for the community spouse’s needs.

Preserving Exempt Assets and Making Allowable Expenditures

Not every asset you have counts toward Medicaid’s limit, so another strategy is to move assets around so that as much as possible is protected. You can keep your primary home so long as its value is below the limit and your spouse or a dependent lives there. You can also keep one vehicle, household goods, personal belongings, and a small burial fund.

One effective strategy is converting countable assets into exempt ones through allowable spending. There are a number of areas where you can spend, such as funeral pre-planning, buying a car, or improving your home ​in certain ways. ​Our team of lawyers, CPAs, and financial advisors can help you design a plan that meets your needs.

Trusts and Advance Planning Tools

Irrevocable trusts are a great way to shield your assets, but timing matters a lot here. If you transfer assets into a Medicaid asset protection trust, you must do so at least five years before you apply for benefits. Transfers made too close to the time of your application will trigger a penalty period of ineligibility equal to the transferred amount divided by the state’s average monthly nursing home cost. However, when you set up these trusts correctly and early, they remove assets from your countable estate while allowing you to retain some control over distributions.

Another option is a Medicaid-compliant annuity. This annuity names Maryland as the first beneficiary of any remaining benefit at the death of the community spouse. The annuity has to be irrevocable so that the spouse can’t borrow against it or accelerate payments. If Maryland puts a Medicaid lien on your estate, the remaining funds in the annuity once both spouses have passed away are payable to Maryland Medicaid.

Talk to a Medicaid Planning Attorney in Columbia, MD

These are just some of the available strategies, and Medicaid rules are notoriously complicated. We can help you come up with a plan that will protect you and your loved ones. Contact Elville and Associates in Columbia, MD today, or reach out to our Annapolis or Rockville offices to schedule a free consultation.

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