Medicaid Spend-Down
Why It’s Never Too Late to Plan
Helping Families Navigate a Complicated Process
When a loved one needs long-term care, the financial pressure can hit quickly. It’s easy to feel overwhelmed or stuck.
To qualify for Medicaid, many families are told to “spend down” their savings. But what does that really mean—and how do you do it when your options are limited?
That’s where a Funeral Trust can make a big difference. Funeral costs are unavoidable—and Medicaid allows you to set aside funds in a funeral trust without counting them against your eligibility.
It’s a legal, compassionate way to protect money for end-of-life expenses while meeting the spend down requirements. We often set up trusts for institutionalized individuals, their spouses, and immediate family members, and can additionally explore other tools such as Medicaid-Compliant Annuities.
Whether you’re just beginning the process or your loved one is already in a facility, we can help you navigate it. With the right plan in place, you can meet Medicaid rules and preserve your family’s peace of mind. It’s never too late to plan.
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Turn Your Spend-Down Strategy into a Lasting Legacy
As the cost of care continues to rise, many families find themselves paying $18,000 a month or more for nursing home or facility care—while still being $50,000 to $100,000 away from qualifying for Medicaid. It’s overwhelming, both emotionally and financially.
We’ve helped countless families across the country navigate this exact situation. By using proven, Medicaid-compliant strategies—like funeral trusts for immediate family members—we can help reduce the amount of assets that need to be spent down, faster and within the rules.
Have you or a family member been told that you need to spend down, or are you planning ahead? We’re here to help.
To learn more about using Funeral Trusts to accelerate your spend down, click below to book your free consultation.
Planning for Loved Ones with Special Needs
When a loved one is living with a disability and receiving Medicaid—whether through SSI/SSDI, or they have assets in a Special Needs Trust (SNT)—their future care isn’t the only thing to consider. While traditional life insurance is often limited or restricted (with exemptions as low as $1,500), it is rarely enough to cover a dignified farewell.
For those on SSI/SSDI, obtaining life insurance can be extremely difficult, and could prevent them from retaining their approved benefits. Additionally, for those with a Special Needs Trust, funeral expenses need to be accounted and paid for during the individual’s lifetime.
That’s why families often turn to the Funeral Trust – a Medicaid-compliant, irrevocable solution that sets money aside without disrupting government benefits. This approach helps ensure that when the time comes, their funeral expenses are covered without putting benefits or eligibility at risk.
It’s about more than eligibility—it’s about dignity, care, and peace of mind.
Medicaid Myths
“My life insurance policy won’t affect my Medicaid eligibility.”
It might. Medicaid counts cash value life insurance as an asset. If your total cash value exceeds your state’s asset limit (often as low as $2,000), you could be disqualified — even if you’ve paid into that policy for years. Consider converting your whole life policy into a Funeral Trust.
“I’ll just deal with Medicaid when the time comes.”
Waiting until a crisis hits can leave families scrambling—potentially depleting their savings and limiting available options. Pre-planning allows you to protect assets, preserve choice, and avoid unnecessary financial and emotional stress.
“If I give my money away, I’ll be eligible right away.”
Gifting money can trigger a Medicaid penalty period, especially if it’s done within the 5-year look-back window. The right planning involves legal, strategic steps that avoid costly mistakes and protect your eligibility. The Funeral Trust is not considered a gift when done properly.
Frequently Asked Questions
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Because Funeral Trusts are fully exempt and benefit both you and your family. It protects funds, simplifies planning, and avoids future stress for your loved ones.
Have Another Question in Mind?
Medicaid spend-down rules are complex and differ from state to state. If you’d like clarity on how they apply to your unique situation, we’re here to help—reach out today.