What Assets Are Exempt from Medicaid in Maryland?

Most of your assets will be counted when you apply for Medicaid in Maryland unless you strategize ahead of time. Some are exempt right off the bat and won’t be counted against you.

The few exempt assets include your primary home and most personal belongings. You can also exempt one car. Most other assets, like second homes, bank accounts, retirement accounts, investment accounts, and cash, will count. If countable assets exceed $2,500 for individuals or $3,000 for married couples, applicants won’t qualify. Putting assets into irrevocable trusts can shield them from Medicaid, as can using assets to pay off debts.

For a free and confidential case review from our Maryland wills and estate planning lawyers, call Rice Law at (410) 694-7291.

What Are Non-Countable Assets for Medicaid in Maryland?

If you’re applying for Medicaid, you must learn which of your assets are exempt. Medicaid eligibility is based on need, and having income or assets over certain thresholds would disqualify you.

To start, your primary house is a non-countable asset. If you are moving into a nursing home, your primary home might only be exempt up to certain equity limits.

Additionally, your personal belongings, household items, and one vehicle are non-countable assets for Medicaid eligibility. Also, burial spaces, some burial accounts, and irrevocable trusts are non-countable assets.

What Are Countable Assets for Medicaid in Maryland?

When you apply for Medicaid, you have to report all assets. Some countable assets might surprise you, like your life insurance policy.

All your bank accounts are countable assets. If any accounts add up to $2,500 if you’re single or $3,000 if you’re married, you won’t qualify for Medicaid.

Retirement accounts are also countable assets. So are stocks, bonds, investment accounts, cash, and real estate other than your primary residence.

Shared assets between spouses are countable, too. However, through “spousal refusal” a non-applicant spouse can refuse to put their income and resources toward an applicant’s long-term care costs. Spousal refusal helps protect the non-applicant spouse’s assets without affecting an applicant’s eligibility.

What Can You Do with Non-Exempt Assets if You Need Medicaid in Maryland?

If you have non-exempt assets that put you over the resource limit for Medicaid, we can help. Our Ellicott City, MD wills and estate planning lawyers can advise you on “spending down” assets or help you set up an irrevocable trust.

Spend Down Non-Exempt Assets

While “spending down” assets can qualify you for Medicaid, it’s not the most effective solution. Medicaid might respond to your application telling you to use assets for healthcare expenses, and only after that point will it approve your application.

Spending down assets involves liquidating them into cash to pay for hospital stays, medications, or other healthcare costs until your savings are nearly gone. Proper strategizing can help protect your assets so you don’t have to spend them down to qualify.

Spending down assets to pay off debt, like your mortgage, credit card debt, or medical debt, might also get you closer to Medicaid eligibility.

You can spend down assets to make reasonable home improvements, too. You can even set aside funds for future burial expenses, as such accounts are non-countable assets.

Transfer Assets to Your Spouse

Putting assets into your spouse’s name can shield them from Medicaid. As mentioned, spousal refusal makes their assets exempt. Since Medicaid looks at transfers and gifts in the past five years, don’t do this too close to your application.

Put Assets into an Irrevocable Trust

We can also put non-exempt assets into trusts. Do this at least five years before you apply for Medicaid. Medicaid might review or challenge any asset transfers or gifts during that time, particularly if you apply for nursing home Medicaid or waivers.

Only irrevocable trusts shield assets from Medicaid. Revocable trusts count since the grantor retains trust control.

Medicaid Asset Protection Trusts (MAPT) are a type of irrevocable trust. With a MAPT, you give control of the trust and its assets to a trustee. You can still benefit from the trust’s assets, but only up to Medicaid limits.

Since you can’t change an irrevocable trust after creating it, we’ll ensure it matches your interests. We can also help you choose a trustee who can’t be your spouse but should be someone you trust.

Putting assets into trust will accomplish several things. First, it can classify assets in it as non-countable, putting you under the resource threshold to qualify for Medicaid.

Second, it can be part of your estate planning and help ensure assets are left to beneficiaries. When irrevocable trusts hold second or even primary homes, investment accounts, or other assets, assets bypass probate, making inheritance easier for beneficiaries. It also makes inheritance possible, as you might otherwise have to spend them down to qualify for Medicaid.

Can You Reapply for Medicaid After You Spend Down Assets or Make Trusts?

If Medicaid responded to your application telling you to spend down assets, you won’t have to wait long before you reapply. However, if you want to put assets in a trust instead, you may have to wait longer.

Planning helps avoid these situations, so reach out to our lawyers before you need Medicaid urgently. This gives you time to make trusts, give gifts, and figure out your estate. Remember, Medicaid looks at transfers within the past five years of applications.

If you recently applied, were denied, and don’t want to spend down assets, Medicaid might question recently created trusts. That doesn’t mean your application will be denied if you apply again sooner than five years.

Call Our Maryland Lawyers to Talk About Your Case Now

Call the Silver Spring, MD wills and estate planning lawyers of Rice Law at (410) 694-7291 for a free case evaluation.