I've been asked by a senior to investigate: What are the things one needs to keep in mind with the issue of an elderly parent with some assets (house + some savings) who may need to enter into a nursing home or assisted living facility at some point and wishes to protect some of one's assets? [United States issue only].

The basics are that there is a federally mandated 5 year look-back period for qualification for Medicaid to pay for care; during that look-back period, relinquishing of one's assets to one's children creates an ineligibility to receive Medicaid then and delays receipt by some amount calculated relative to typical nursing home expenses in one's area, which could be perhaps several years or so.

(Previous to the deficit Reduction Act of 2005, this look-back period was only three years.)

What are the various pros and cons to such a transfer of one's wealth, if one thinks one may need (maybe) to enter such a facility in a few (3-7?) years? References to taxes and other unforeseen concerns would be helpful.

  • 2
    Honestly this is something you should talk to a professional estate planning attorney about. The laws and rules will vary from state to state and mistake could be very expensive.
    – stoj
    Feb 2, 2012 at 0:40

1 Answer 1


There's a few issues:

  • Ethical: Transferring assets to your kids or grandchildren is nice, but are you comfortable with making yourself indigent so that you can take advantage of Medicaid/Welfare services intended for the poor?
  • Medical/Quality of Life: Medicaid doesn't reimburse at high rates, so you will have difficulty getting admitted to a high quality facility. If you have money, you can pay to get into a nice, private facility, and when your funds are exhausted Medicaid will pick up the rest. (Usually you are protected from being evicted.)
  • Need: Most people do not require a lengthy stay in a nursing home.
  • Cost: Setting up trusts to shield assets is both expensive and risky.
  • I am caring for my 90 year old father and understand where the question is coming from. In most cases the person does not have enough cash/assets to sustain them to the end. My father only had 30 thousand dollars, yet he needed around the clock care. At 5000 dollars a month, 30k ain't much. However with that money sitting in his bank, he did not qualify for any assistance. What options is someone left with? Assets can be moved below the radar. In most cases there is a lower transaction limit that is looked at. Just move the money below that threshold. May 20, 2012 at 17:42

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .