Is Medicaid Asset Protection Legal?

The ability to legally protect all or a significant portion of your spouse or parent’s assets and qualify for nursing home Medicaid may sound too good to be true. You may even be asking yourself “is it legal to protect assets in order to qualify for nursing home Medicaid?” The answer is “yes” when you work with me to protect assets within the limits of the law. The answer is “no” when you are performing an action that is dishonest or fraudulent.

How Can Asset Protection Be Legal?

I think the best analogy for nursing home asset protection is taxes. The tax code includes countless deductions you can use to reduce your taxable income. If you know about them and choose to use them you can reduce your tax bill by a lot. But the IRS and the government are not standing next to you to make sure you claim every deduction you are eligible for, that is your job and the less you know the less they have to pay. If you don’t know about all the deductions and opportunities available to you then you can end up with a higher tax bill.

Using the deductions the law gives you does not make anything about your choice to claim that deduction illegal as long as you are entitled to claim it. The law also gives you the opportunity to protect your assets from nursing home bills in much the same way the law gives everyone a chance to reduce their taxes. The biggest difference between people who spend a fortune on nursing home bills and people who don’t is who knows enough to take advantage of these opportunities.

How Can Asset Protection Be Illegal?

There is one easy way to tell the difference between the legal variety of asset protection that I offer and the illegal variety of asset protection. That fact is disclosure. Every transaction I recommend to my clients to protect their assets is disclosed to the HHSC as part of the nursing home Medicaid eligibility process. The HHSC reviews the transaction, reviews the law, and the desired result is achieved because I don’t recommend you do something unless I have the law on my side. The asset protection I recommend is addressed in the law so there is no need to hide anything.

If the kind of asset protection you are considering is a transaction you would not disclose to the HHSC and would not achieve the desired result if it were disclosed, then that is a pretty good indicator that the action you are looking at is illegal and may be determined to be fraudulent. And if the HHSC discovers they have been paying out nursing home Medicaid benefits when a person was actually not eligible but they did not discover it until later because of an undisclosed transaction, then it becomes an enforcement case which is something you probably want to avoid.

One example of the fraudulent and illegal kind of asset protection that people approach me with from time to time involve misrepresenting the date of a transfer. For example, some people think it is o.k. to have the Medicaid recipient sign over the title to their vehicle without accurately reporting the date it was signed. They may plan to hold on to it until after the Medicaid recipient passes away and then date the previously signed title to shortly before they passed away. Does that dishonesty really sound like a good idea?

Another example is signing a deed transferring ownership of real estate without recording the deed on the land records until after the Medicaid recipient passes away. 

How Do You Want To Protect Your Assets?

Both of the examples above are dishonest and fraudulent transactions designed to obtain Medicaid benefits for someone that is not properly eligible to receive those benefits. If you are looking for a Woodlands Medicaid Lawyer to give you a stamp of approval on that proposition, then I can’t help you.

I can help you if you are looking for 100% honest and legal asset protection. Depending on the details of your case I may be able to protect all or a significant portion of your loved one’s assets from nursing home bills using completely legal techniques that do not leave you with the uncertainty of the government seeking restitution for nursing home Medicaid benefits it was not supposed to pay.