Stories
The Proactive Plan: The Chen Family (Had an Irrevocable Trust)
Four years before Mrs. Chen needed care, she and her husband, Mr. Chen, met with an elder-law attorney. They decided to create an Irrevocable Trust and transferred some non-exempt assets (a little savings and a modest brokerage account) into it.
In 2025, four years after establishing the trust, Mrs. Chen suffered a significant stroke and required skilled nursing home care at $12,000 per month. Their assets were insufficient to cover this indefinitely.
The Outcome — No Spend-Down on Trust Assets
When they applied for Medicaid, the assets in the Irrevocable Trust were not counted, because they had protected the funeral costs. Their spend-down consumed her existing assets and her monthly income, which was contributed toward her care. The Chen family celebrated her life the way she would have wanted, preserving their legacy.
The Late-Stage Panic: The Miller Family (Money Given Away Within the Look-Back Period)
Mr. Miller, a widower, was diagnosed with early dementia in 2022. Concerned about his declining health, his daughter met with a friend who advised transferring assets totaling $300,000 out of his accounts in January 2023.
In January 2025, just two years after moving the funds, Mr. Miller’s condition worsened and he needed immediate long-term care.
The Outcome — Medicaid Penalty Imposed
Because the $300,000 was transferred within the five-year look-back period, Medicaid deemed it an improper transfer and calculated a penalty period by dividing the amount by the state’s average monthly cost of care (about $10,000). The family had to pay for roughly 30 months of care before Medicaid would begin covering expenses — and ended up taking out a reverse mortgage on the home they had intended to protect.
The Unprepared: The Garcia Family (No Trust)
Mr. and Mrs. Garcia relied on Medicare and modest savings and never engaged in long-term-care planning, with only simple Wills. Their only significant asset was their home, valued at $400,000, plus $150,000 in a joint savings account.
In 2024, Mrs. Garcia fell and required permanent residency in a long-term-care facility.
The Outcome — Forced Spend-Down
To qualify, Mrs. Garcia could only keep a minimal amount of countable assets. Mr. Garcia (the community spouse) could keep the home and a protected share of the savings (the Community Spouse Resource Allowance), but their combined savings were over the allowance, so they had to spend down the excess on her care. After his passing, the state’s Medicaid Estate Recovery Program could place a lien on the home to recoup costs.
The Hidden Risk: The Wilson Family (A Revocable Living Trust)
The Wilsons were told a Revocable Living Trust was essential for avoiding probate, so they created one five years ago, placing their home and investments inside — but retained the power to take the assets out whenever they wanted.
In 2025, Mr. Wilson developed Alzheimer’s and needed long-term care.
The Outcome — The Trust Was Countable
Because a Revocable Trust lets the owner take assets back at any time, Medicaid considers those assets available to the applicant. The home and investments were not protected, and the family faced the same spend-down as the Garcia family. They avoided probate, but did not achieve Medicaid asset protection.
