When you’re planning for long-term care, there’s one essential truth that can’t be overlooked: Medicaid is not the same in every state.
While Medicaid is a federal program, the way it works in practice can look very different depending on where you live—and those differences could mean the difference between protecting your life’s savings or spending them down to qualify for care.
At Axis Estate Planning, we guide Michigan families through the complex world of Medicaid planning with a deep understanding of both federal law and state-specific rules—because when it comes to protecting what matters most, one-size-fits-all simply won’t cut it.
Why the Rules Vary by State
Medicaid is funded jointly by the federal government and the states. While federal law sets the framework, each state administers its own version of the program, with flexibility in how certain rules are interpreted and applied.
That means your sibling in another state—or even your neighbor across the border—might be facing entirely different Medicaid eligibility rules than you are here in Michigan.
Examples of State-by-State Differences
Here are just a few ways that Medicaid rules can vary and why local legal guidance is essential:
- Retirement Accounts
Some states count IRAs and 401(k)s as available assets. Others don’t. - Planning Tools Like Annuities or Promissory Notes
What’s allowed in one state might be disallowed in another. - Spousal Protections
The amount a healthy spouse can retain when the other spouse needs care differs by state. - Homestead Exemptions
Whether or not your home remains protected when transferred into a trust can depend on how your state defines “exempt” property.
Medicaid Asset Protection Trusts (MAPTs): Powerful, But Not Universal
Medicaid Asset Protection Trusts (MAPTs) are an effective strategy to safeguard your home and savings from long-term care costs—but they must be tailored to your state’s rules to be effective.
For example:
- Trustee Rules: Some states restrict who can serve as trustee, especially if the person setting up the trust maintains control.
- Income Rights: Some states allow income to be retained without penalty; others may count it against eligibility.
- Use of the Home: In some states, you can retain the right to live in your home even if it’s placed in a trust. In others, that could disqualify you from benefits.
A trust that works beautifully in Florida may completely fail here in Michigan.
Why Local Legal Guidance Matters
With ongoing uncertainty about the future of Medicaid at the federal level—including potential cuts and shifts in funding—relying on a generic plan is risky.
The cost of long-term care is rising, and more families will need to rely on Medicaid to help cover those expenses. Planning now, with the right strategies for Michigan, is one of the most important financial decisions you can make.
Let’s Make Sure Your Plan Is Ready—When It Matters Most.
If you’re considering a Medicaid Asset Protection Trust or any long-term care planning strategy, don’t go it alone. Work with a trusted estate planning attorney who understands the nuances of Michigan law and how to protect your assets the right way.
Visit Us: 900 Wilshire Drive, Suite 105, Troy, MI 48084
Call Us: (248) 251-1001
Learn More: www.axisattorneys.com
Axis Estate Planning
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