When a loved one needs long-term care, families often face two major concerns: ensuring quality care and protecting hard-earned assets. In Louisiana, the cost of nursing home care can quickly deplete a family’s savings if proper planning isn’t done ahead of time. Fortunately, there are legal strategies that can help preserve assets while ensuring your loved one receives the care they need.
Understanding Medicaid and Long-Term Care Costs
Many people are surprised to learn that Medicare does not pay for long-term nursing home care. Medicaid, however, can cover these costs, but it has strict financial eligibility rules. To qualify, a person’s income and assets must fall below certain limits. In Louisiana, an applicant typically cannot have more than $2,000 in countable assets to qualify for Medicaid nursing home coverage.
This often creates a dilemma. Families want to protect a lifetime of savings from being drained by nursing home expenses, but transferring or giving away assets too close to applying for Medicaid can trigger penalties. Louisiana follows the federal “five-year lookback rule,” meaning Medicaid will review financial transactions from the past five years to ensure no assets were transferred for less than fair market value. If such transfers are found, Medicaid can impose a period of ineligibility for benefits.
Start Planning Early
The best way to protect assets is through early, proactive planning. By working with an elder law attorney before a nursing home stay becomes necessary, families can explore options like trusts, asset transfers, and other lawful strategies that comply with Medicaid rules. This type of planning is often called “Medicaid planning” or “long-term care planning.”
An attorney can help establish a plan that balances your loved one’s need for care with the desire to preserve family assets. For example, certain types of irrevocable trusts can hold property or savings so they are not counted as part of an individual’s Medicaid assets, provided the trust is created well before the five-year lookback period.
Understanding Exempt Assets
Not all assets count against Medicaid eligibility. Some property is considered “exempt,” meaning it does not have to be spent down to qualify. In Louisiana, exempt assets may include:
- A primary residence (up to a certain equity limit if a spouse or dependent lives there)
- One vehicle used for transportation
- Personal belongings and household goods
- Certain prepaid funeral or burial arrangements
Knowing what is exempt can make a significant difference in how a family prepares for Medicaid. A knowledgeable elder law attorney can help identify which assets are protected and how to legally structure finances to preserve as much as possible.
Spousal Protections
When one spouse enters a nursing home and applies for Medicaid, the other spouse, called the “community spouse,” is entitled to keep a portion of the couple’s assets and income. Louisiana law provides “spousal impoverishment protections” to ensure the healthy spouse does not lose financial stability. An attorney can help calculate and protect the maximum amount the community spouse may retain.
Crisis Planning Options
Even if a loved one is already in or about to enter a nursing home, it’s not too late to seek help. While early planning is ideal, experienced attorneys can still assist with crisis Medicaid planning. This may involve restructuring assets, using annuities, or applying for certain exemptions to accelerate Medicaid eligibility and minimize out-of-pocket costs.
Take the Next Step, Contact Us Today
At Losavio & DeJean, LLC, we help Louisiana families safeguard their assets and secure quality care for their loved ones. Whether you are planning years in advance or facing an immediate need, our attorneys can guide you through the process with clarity and compassion.
Contact us today to schedule a consultation and begin planning with confidence.