Low-income families and individuals may qualify for health coverage through Medicaid. However, with the rising costs of long-term care, Medicaid planning has become essential for people of all income levels—including higher net worth individuals—who want to avoid spending down assets to qualify for benefits. Through strategic legal and financial planning, individuals can restructure their assets to increase their chances of Medicaid eligibility without sacrificing their legacy.
Why Medicaid Planning Matters
There are three key reasons to consider Medicaid planning:
1. Long-Term Care Costs
Nursing homes and assisted living facilities are expensive. Medicaid can help cover these costs, but qualifying often requires early preparation. Planning ahead ensures you’re not forced to deplete your life savings to afford care.
2. Asset Protection
Medicaid sets strict income and asset limits. By working with an experienced attorney, families can legally restructure assets to fall within eligibility guidelines—helping preserve real estate, savings, and inheritances.
3. Estate Planning Integration
Medicaid planning and estate planning often go hand in hand. With the right approach, you can protect your legacy while maintaining access to long-term care support when needed.
“Proper Medicaid planning can mean the difference between losing everything and leaving a meaningful legacy.”
How Common Is the Need for Long-Term Care?
According to the Administration on Aging, nearly 70% of people turning age 65 today will need some form of long-term care during their lifetime. Without a plan in place, families can face financial strain and difficult decisions during already challenging times.
What Is a Medicaid Asset Protection Trust?
A Medicaid Asset Protection Trust (MAPT) is a legal tool that allows you to transfer assets out of your name while still maintaining some control and benefit. Once assets are held in the trust, they are no longer counted toward Medicaid eligibility, provided the trust is set up far enough in advance—typically at least five years before applying for benefits (this is known as the Medicaid look-back period).
When Should You Start Medicaid Planning?
The best time to begin Medicaid planning is before you need long-term care. Starting early allows for more flexibility, more options, and full compliance with Medicaid’s five-year look-back rule. However, even if a loved one is already in a nursing home, crisis planning may still help protect some assets.
Can You Keep Your Home and Still Qualify for Medicaid?
In Arkansas and many other states, your primary residence is typically exempt up to a certain value, but Medicaid estate recovery laws may allow the state to seek reimbursement from your estate after death. Advanced planning can help ensure your home stays in the family.
How a Medicaid Planning Attorney Can Help
An experienced attorney can guide you through options such as:
- Creating a Medicaid Asset Protection Trust
- Converting countable assets into exempt ones
- Using promissory notes and annuities for crisis planning
- Gifting strategies within compliance guidelines
- Coordinating Medicaid and estate planning goals
FAQs About Medicaid Planning in Arkansas
What is the Medicaid look-back period in Arkansas?
Arkansas enforces a five-year look-back period. Transfers of assets within five years of applying for Medicaid may result in penalties or delayed eligibility.
Can I gift money to my children and still qualify for Medicaid?
Gifting can disqualify you for a period of time under Medicaid rules. An attorney can help you explore legal alternatives to gifting that still preserve assets.
What is the difference between Medicare and Medicaid?
Medicare is a federal program primarily for people over 65, while Medicaid is a state and federal program based on income and asset limits. Medicaid covers long-term care, whereas Medicare does not cover extended nursing home stays.
Speak With a Medicaid Planning Attorney
Planning for long-term care and asset protection doesn’t have to be overwhelming. Our experienced Medicaid planning attorneys understand the legal and financial complexities families face when navigating long-term care decisions.
We have offices in Sherwood, Searcy, Benton, and Little Rock. If you’d like to discuss your specific situation, please contact us at 501-834-2070 to schedule a consultation. We look forward to helping you create a plan that protects your future and your family.