Medicaid planning attorney fees vary, and the attorney sets the fee. This page states no fee figures. It covers instead the rules that bear on a long-term-care Medicaid matter: how many assets are involved, whether a spouse still lives at home, whether gifts were made inside the 60-month federal look-back, whether a trust is involved, and how the state's own rules apply.
Medicaid planning here means making decisions about assets and income in light of the eligibility rules for long-term-care Medicaid, including the rules that protect a spouse at home from becoming impoverished.
What Medicaid Planning Involves
Medicaid planning concerns how a person who needs long-term care meets a state's eligibility rules for Medicaid coverage of that care, and what the rules allow for a spouse at home. Medicaid is a joint federal and state program. The federal eligibility policy page explains that eligibility for people 65 and older is generally determined using the income methods of the Supplemental Security Income program, and that some states use more restrictive criteria.
Within that framework, the subjects involved include:
- Sorting assets. A countable asset is one the state counts toward its eligibility limit. An exempt asset is one the state sets aside.
- Past transfers. The look-back period is the window of time the state reviews for gifts or other transfers made for less than fair market value.
- Trusts and annuities. Federal and state rules address how each is treated.
- Spousal protections. These are the allowances for the community spouse, meaning the husband or wife who stays at home.
Medicaid planning is different from general estate planning. Estate planning is about passing property at death. Medicaid planning concerns eligibility for long-term-care coverage, and what happens to the home and estate afterward under Medicaid's own rules.
Federal law sets the framework every state follows, but each state runs its own program. For that reason, a matter depends on one state's rules as well as federal law. This page does not cover Medicare, private long-term-care insurance or veterans' benefits.
What Shapes a Medicaid Planning Matter
Assets. Investment accounts, retirement accounts, a second property and jointly titled assets are each classified as countable or exempt under the state's rules. The home has its own federal limit, which is explained below.
A spouse at home. When the community spouse remains at home, the spousal-impoverishment protections in 42 U.S.C. § 1396r-5 apply. These rules require the couple's combined resources to be computed as of the start of the first continuous period of institutionalization, and, at either spouse's request, the state must promptly assess and document that total. Readers with a husband or wife still at home will find this explained more fully in Medicaid planning for married couples.
Look-back review. Federal law sets the look-back at 60 months for any transfer made on or after February 8, 2006 (42 U.S.C. § 1396p(c)(1)(B)(i)), counted back, for an institutionalized person, from the first date the person both is institutionalized and has applied for medical assistance. If gifts were made inside that window, a penalty period may apply. A penalty period is a stretch of months when the person is ineligible for Medicaid coverage of nursing facility services and similar long-term care.
For a transfer made on or after February 8, 2006, the penalty starts on the later of two dates: the first day of a month during or after which assets were transferred for less than fair market value, or the date the person is eligible for medical assistance under the State plan and would otherwise be receiving institutional level care based on an approved application, but for the application of the penalty period; and it does not start during any other period of ineligibility (42 U.S.C. § 1396p(c)(1)(D)(ii)). Because the start date depends on when the person is otherwise eligible, a gift made four years ago inside the window is penalized the same way as one made last month. For an institutionalized person, the number of months of ineligibility is the total, cumulative uncompensated value of the assets transferred by the person or the spouse on or after the look-back date, divided by the average monthly cost to a private patient of nursing facility services in the state (or, at the state's option, in the community) at the time of application. A state may not round down a fractional period.
Exceptions. Not every transfer is penalized. A transfer to the person's spouse carries no transfer penalty (42 U.S.C. § 1396p(c)(2)(B)(i)). The statute also lists exceptions, including a transfer of the home to the spouse. Which exceptions apply depends on the facts of each transfer.
Trusts. A trust funded with the person's own money can be treated as available to them, as the federal eligibility policy page notes. How a trust is treated depends on its terms and on the state's rules.
Applications and appeals. Filing the application, answering requests for documents and handling a denial or fair hearing are separate steps in the process. For families already paying for care, see Medicaid crisis planning.
The Federal Rules Behind Medicaid Planning
42 U.S.C. § 1396p is the federal statute on transfers of assets, trusts, liens and estate recovery. Every state's long-term-care Medicaid program operates inside it. The look-back and penalty timing described above come from this section.
The home-equity limit. Under 42 U.S.C. § 1396p(f), a person whose equity interest in the home exceeds the limit is not eligible for Medicaid coverage of nursing facility services or other long-term care services. The limit does not apply when the person's spouse, or a child who is under 21 or is blind or disabled, is lawfully residing in the home, and the statute directs a process to waive it in a demonstrated hardship. The CMS 2026 standards bulletin gives the home-equity limits effective January 1, 2026 as a minimum of $752,000 and a maximum of $1,130,000; which figure a state uses depends on its rules.
Estate recovery. Estate recovery is a state's claim against a deceased Medicaid member's estate for care that Medicaid paid for, and 42 U.S.C. § 1396p(b) governs it. Federal law defers recovery while a surviving spouse, a child under 21, or a blind or disabled child survives (42 U.S.C. § 1396p(b)(2)). The deferral postpones the claim but does not cancel it. States must also have procedures to waive recovery when it would cause undue hardship (42 U.S.C. § 1396p(b)(3)).
Spousal protections. 42 U.S.C. § 1396r-5 lets the spouse in care transfer resources to the community spouse "without regard to section 1396p(c)(1)." The amount is limited to the community spouse resource allowance, which the statute defines as the amount, if any, by which the greatest of four measures it lists exceeds the resources otherwise available to the community spouse. The transfer applies "only to the extent the resources of the institutionalized spouse are transferred to (or for the sole benefit of) the community spouse."
The minimum monthly maintenance needs allowance is the income floor protected for the spouse at home. According to the 2026 standards bulletin, the 2026 federal figures are:
- Resource standards, effective January 1, 2026: a minimum of $32,532 and a maximum of $162,660.
- Maximum monthly maintenance needs allowance, effective January 1, 2026: $4,066.50.
- Minimum monthly maintenance needs allowance, effective July 1, 2026: $2,705 in all states except Alaska ($3,381.25) and Hawaii ($3,111.25).
The minimum allowance changes each July 1. The maximum allowance and the resource figures change each January 1.
Each state carries out these federal rules in its own way.