How to protect assets from Medicaid (legally)

Updated 2026-10-16 · Expert review in progress

The short answer

Legal planning to protect assets from Medicaid works within the rules, not around them. The main concepts are planning more than five years ahead, using what the rules already exclude, the protections for a spouse at home, exempt transfers, certain trusts, and written caregiver agreements. Each depends on your state's rules and needs an elder law attorney.

You worked for decades for your savings and your home. It is natural to want to know whether care costs could take all of it, and whether anything can be done about that.

This post explains, in general terms, how legal planning for Medicaid works, with Washington as the worked example. It describes concepts so you know what to ask; it does not recommend any of them for you. It is part of our guide to paying for care and protecting what you leave.

What "legally" means here

Medicaid for long-term care has strict limits on savings. In Washington, a single person can keep $2,000 in countable resources (WAC 182-513-1350).

Legal planning means using the rules as written: what they exclude, what they allow, and when. It never means hiding assets or leaving them off an application. Every tool below is visible to the state and works only because the rules allow it.

The rules are also designed to catch shortcuts. Washington presumes any gift was made to qualify for Medicaid or avoid estate recovery, unless you can show otherwise with convincing evidence (WAC 182-513-1363).

Planning concepts, at a glance

Concept	How it works, in general	The catch	Who to ask
Plan more than five years ahead	Transfers made before the 60-month look-back aren't reviewed	You give up control of what you give away, and you can't know when you'll need care	Elder law attorney
Use what's already excluded	The home, one car, household goods and burial funds don't count toward the limit	Limits apply, and the home can still face estate recovery after death	Elder law attorney
Protections for a spouse at home	The spouse at home keeps a share of savings and some income	Only for married couples; the figures change regularly	Elder law attorney
Exempt transfers	Some transfers, like those to a spouse or a disabled child, cause no delay	The conditions are narrow and documented	Elder law attorney
Certain trusts	Some irrevocable trusts are treated differently from savings	A revocable trust doesn't help; irrevocable trusts are hard to undo	Elder law attorney
Written caregiver agreements	Paying a relative for care at a fair rate isn't a gift	Seven conditions in Washington must all be met	Elder law attorney
Long-term care partnership plans	Protected assets are disregarded for estate recovery	You buy it years ahead, while healthy enough to qualify	Licensed agent and attorney

The right column is the same almost everywhere on purpose. These are legal tools with real trade-offs, and an estate planning or elder law attorney in your state is the person to weigh them.

Planning more than five years ahead

Medicaid looks back 60 months for gifts and below-value sales (WAC 182-513-1363). Gifts made before that window aren't reviewed for a penalty.

That is why timing comes up in every conversation about this. But a gift is a gift: once it's given, it belongs to someone else, along with their creditors, divorces and choices. Our post on the Medicaid look-back period explains how the window and the penalty work.

Using what the rules already exclude

Some things don't count toward the $2,000 limit at all. In Washington, these include your home if you live there or intend to return. One vehicle, household goods and burial funds within limits are excluded too.

Spending your own money on yourself is also allowed. Paying your bills, your care and your medical costs is exactly what a spend-down is. Our post on the Medicaid spend-down has Washington's full list and the home equity cap.

Protections for a spouse at home

When one spouse needs care and the other stays home, Washington protects the spouse at home (WAC 182-513-1355). They keep the larger of half the couple's countable resources, up to a federal maximum, or the state standard.

HCA lists the federal maximum as $162,660 (from January 1, 2026) and the state standard as $72,529 (from July 1, 2025) (HCA standards). The spouse at home may also receive part of the other spouse's income, up to a monthly maximum.

Exempt transfers

Washington lists transfers that cause no delay. They include anything to a spouse, transfers to a child who meets the state's disability rules, and the home to certain family members (WAC 182-513-1363).

One is a home transfer to a child who lived with you and cared for you for at least two years. It has six conditions, including a doctor's documentation that the care kept you out of a facility. These are narrow by design, and every condition needs proof.

Trusts: what helps and what doesn't

Here is the plain version of Washington's rules.

A revocable trust does not protect assets for Medicaid. Assets in a trust you set up and can change are counted as available resources (WAC 182-516-0115). A revocable living trust is still useful for avoiding probate and naming a trustee.
An irrevocable trust you fund yourself is looked at closely. Any part that could be paid to you is counted. Any part that can never be paid to you is treated as a transfer, which brings in the look-back (WAC 182-516-0130).
Some trusts for people with disabilities are treated differently. Federal law carves out certain trusts for a disabled person under 65 and pooled trusts run by nonprofits (42 U.S.C. 1396p(d)(4)). The state is generally repaid from what remains at death.
A trust someone else creates for you, with their money, is a third-party trust. Washington has separate rules for these (WAC 182-516-0140).

Our post on revocable vs. irrevocable trusts explains the difference more broadly. Whether any trust affects Medicaid depends on its exact terms, so a lawyer needs to draft and review it.

Written caregiver agreements

Paying a family member to care for you can be a fair exchange, not a gift. Washington allows it only when seven conditions are met, including a documented need and a rate comparable to fair market value (WAC 182-513-1363).

Payment must be made within one calendar month of the care.

Long-term care partnership plans

A qualified long-term care partnership plan is a kind of long-term care insurance you buy ahead of time. In Washington, assets it protects are disregarded for estate recovery (WAC 182-527-2746; DSHS 14-454).

If you are shopping for long-term care insurance, ask whether a plan qualifies. Our post on Medicaid estate recovery explains what the state can seek after death.

What tends to backfire

A few moves come up often and cause trouble:

Last-minute gifts. A gift inside the 60 months delays Medicaid, and the delay starts only once you'd otherwise qualify.
Adding a child to the deed. That is usually a transfer inside the look-back. In Washington, a joint tenancy interest can also be reached by estate recovery.
Gifts made by a helper. If your agent made the gift, a hardship waiver generally isn't available unless the state finds financial exploitation (WAC 182-513-1367).
A power of attorney without gifting language. In Washington, an agent can make gifts only if the document expressly grants that power (RCW 11.125.240).

That last point cuts both ways. Gifting power can enable planning, but it is also a common route for misuse. Our post on elder financial exploitation covers how to guard against that, and daily money managers describes help with routine bills.

Questions to bring to an elder law attorney

What counts toward the limit for me, and what doesn't?
If I'm married, what would my spouse keep?
Is any trust I already have counted?
What would each option cost me in control and flexibility?
What does my power of attorney allow my agent to do?
How would estate recovery apply to my home?

If Medicaid ends up paying for your care

Kinly's Lifetime Promise speaks to this directly (the promise). After two years of membership, if you spend down to the point where Medicaid is paying for your care, Kinly stops billing you. The membership continues and the documents stand.

When you are weighing who should carry out your plan, our guide to choosing professional help compares the options.

Common questions

How can I protect my savings if I need Medicaid for nursing care?

Legal planning uses what the rules allow. That includes planning more than five years ahead, excluded assets like the home, spousal protections, exempt transfers, certain trusts and caregiver agreements. Each depends on your state's rules, so talk with an elder law attorney before acting.

Does a revocable living trust protect assets from Medicaid?

No. In Washington, assets in a revocable trust you set up are counted as available resources under WAC 182-516-0115. A revocable trust helps avoid probate, not Medicaid's limits.

Is it legal to give money to my children before needing Medicaid?

Giving money away is legal, but gifts within 60 months before applying can delay Medicaid. In Washington, the delay is the total divided by the average daily private nursing home cost, $485 as of October 2026.

Can I pay my daughter for taking care of me?

Yes, if it's a genuine exchange for care. Washington requires seven conditions, including a documented need, a fair market rate and payment within one calendar month of the care. A written agreement drafted by a lawyer helps.

Do these rules work the same in every state?

No. Federal law sets the framework, including the 60-month look-back, but each state writes many of its own rules and figures. This post uses Washington's rules; an elder law attorney in your state can explain yours.

Sources

This page is general information, not legal or financial advice. Laws vary by state.

Keep reading

Money, Medicaid and feesDaily money managers: who pays your bills when you can'tWhat a daily money manager does and doesn't do, how they differ from a financial power of attorney or trustee, how they charge, and how to check one out.Money, Medicaid and feesElder financial exploitation: how to protect yourselfElder financial exploitation, explained: what Washington law counts, the warning signs, the scams to know, simple protections and where to report it.Money, Medicaid and feesPaying for care and protecting what you leaveHow to pay for long-term care in plain words: savings, long-term care insurance, Medicare's limits, Medicaid spend-down, the look-back and fees.