O'CONNOR & RIVARD ATTORNEYS PC Kathleen E. O'Connor Brenda M. Rivard
“Advising You and Your Family Through All Life’s Transitions”
Protecting Your Assets From Paying for Nursing Home Care

As elder law attorneys, we frequently get calls from clients indicating that they want to protect their assets from paying for nursing home care. Generally, the earlier the client calls to discuss their planning, the better. 

The options that are available to protect assets are individual to each client and we must have a meeting to thoroughly review and discuss all of your options.  Some of the factors that determine the type of planning we recommend are whether we are assisting a single client or a married couple, the amount of assets they own, how they own their assets, the health of the clients, whether they have any disabled children, whether they have made gifts of their assets within the last five years, whether they live with siblings and whether they will soon need nursing home care.

The following are some planning options that are available.  The options that we recommend are individual to each client and depend upon the factors listed above:

Reducing Excess Assets Without Penalty    Prior To Date Seeking Medicaid Eligibility:

  • Purchase household and personal belongings: intent of purchase, timing of purchase and relationship of item to applicant’s needs considered;
  • Payment of Existing and Anticipated Debts (mortgage, car loan);  
  • Prepayment of Anticipated Debts (real estate, income taxes);
  • Payment for Necessary Repairs to Noncountable Assets;
  • Prepayment of Funeral and Burial Expenses;
  • Open a $1,500 burial account (for community spouse and applicant).

Transfer Home to Permissible Transferees Without Penalty:

  • Spouse;
  • Caretaker Child;
  • Child who is blind, disabled;
  • Sibling with equity interest and who resided in home for at least one year prior to institutionalization.
Wills With Testamentary Trusts for Married Couples:

  • For married couples it is possible to preserve at least 50% of the married couple’s assets if the first spouse to die dies without needing to apply for Medicaid benefits, requires dividing the assets as best as possible before death.
  • Also used during Medicaid application process by community spouse to protect community spouse resource allowance in the event the community spouse predeceases the institutionalized spouse.
Single Premium Immediate Annuities
  • Can be a valuable strategy for protecting all or a portion of a couple’s excess assets for the community spouse.  An annuity is a right to receive periodic payments for life or for a term of years in return for single premium payment; 
  • Purchase of annuity is not disqualifying as long as the applicant's spouse is the annuitant and the annuity payments are for life or for a term that is within the annuitant’s life expectancy, as verified by actuarial tables;
  • Downside is that the State must be named beneficiary upon the death of the community spouse to the extent Medicaid benefits are paid on behalf of the institutionalized spouse and possibly the community spouse as well.

Pooled Trust for Single Disabled Individuals:

  • Can use excess assets of a single disabled individual to fund a pooled trust;
  • The individual in most instances will be financially eligible for Medicaid upon funding of pooled trust;
  • Funds in the pooled trust will be available to pay for the supplemental needs of the nursing home resident that MassHealth will not pay for;
  • Payback provision in the trust for Medicaid benefits paid out during the trust beneficiary’s lifetime and trustee fees to be paid from pooled trust funds;
  • If any funds remaining after payment of MassHealth lien and Trust fees, trust beneficiary can name beneficiaries to receiving remaining funds upon death.


668 Pleasant Street, Worcester, MA 01602 Phone: (508) 756-9229 Fax: (508) 754-6407
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