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Planning Ahead: Part Seven

Dunn & Hemphill, PA • Nov 29, 2020

Defining Exempt and Non-Countable Resources

In Part 6, we explained resource limits for “nursing home” Medicaid qualification. Often, the key to meeting those limits is converting assets that you own into resources that Medicaid considers exempt or non-countable. In order to take advantage of this simple asset protection planning strategy, it is helpful to know which resources are exempt and which are non-countable. Exempt resources include one’s homestead (up to $595,000 in equity in 2020); all of one’s furniture, household goods, and other personal property; one motor vehicle; burial spaces for you and your immediate family; an irrevocable, prepaid funeral contract; and permanent life insurance if the face value of all policies is $10,000 or less. You can convert cash into a non-countable resource by loaning it to trusted family members and taking back a Medicaid compliant promissory note that yields a minimum annual return on principal of 6%. You can even convert a retirement account into a non-countable resource if you begin withdrawing a certain amount each month. Of course this list is not all-inclusive, so it is important to consult with an experienced estate planner who can look at all of your assets and determine what the Mississippi Division of Medicaid will consider countable resources and assist you with a planned spend-down. If you believe you have five years to plan, you can reduce exempt and countable resources by gifting them to trustworthy family members or putting them into an irrevocable Medicaid Asset Protection Trust. We will discuss these options next week.

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