Planning for long-term care is something many families put off until it may be too late. The truth is, nursing home and assisted living costs can quickly drain savings if you’re not prepared. Medicaid can help cover these expenses, but qualifying isn’t as simple as filling out a form. Both North and South Carolina have strict rules around income, assets, and timing. With the right planning, though, you can protect your resources while ensuring access to the care you or your loved one may need.
Why Medicaid Planning Matters
Medicaid is a joint federal and state program, but the rules vary by state. In North and South Carolina, strict income and asset limits determine who qualifies. Without planning, families often face the difficult choice of spending down their life savings to become eligible. Careful Medicaid planning allows you to balance these requirements with your goal of protecting what you’ve built for your family.
Key Eligibility Rules
To understand how planning works, it helps to know the basics:
- Income limits: Medicaid looks at monthly income, including pensions, Social Security, and retirement withdrawals. If your income exceeds the threshold, certain strategies may still help you qualify.
- Asset limits: Only a limited amount of countable assets, such as cash, investments, or a second property, is permitted. Your primary residence, personal belongings, and one vehicle are generally exempt.
- Look-back period: Both states apply a five-year look-back period. This means any transfers of assets for less than fair market value during that time may affect your eligibility.
Understanding these rules is the first step in building a plan that preserves your financial security.
Asset Protection Strategies
There are lawful ways to protect assets while still qualifying for Medicaid, but timing is critical. Some common strategies include:
- Spousal protections: If one spouse needs care and the other remains at home, Medicaid allows the healthy spouse to retain certain assets and income.
- Irrevocable trusts: Placing assets into a properly structured trust can remove them from your countable estate, provided it is done outside the look-back period.
- Exempt transfers: Some transfers, such as those to a spouse, a child with a disability, or into certain annuities, are not penalized.
Each situation is unique, which is why it’s important to tailor asset protection strategies to your family’s goals.
Spend-Down Approaches
For many families, qualifying for Medicaid requires a “spend-down” of assets or income. This doesn’t mean wasting money, but instead using resources in ways that benefit you or your spouse while bringing you within Medicaid limits. Examples include:
- Paying off debts, such as mortgages or medical bills.
- Making necessary home improvements, like a new roof or an accessible bathroom.
- Purchasing exempt assets, such as a vehicle for the healthy spouse.
These steps not only help with eligibility but also improve quality of life.
Timing and Planning Ahead
The best Medicaid planning happens before a crisis. Acting early gives you more options, particularly when using trusts or making exempt transfers. Even if a loved one is already in need of care, though, strategies are still available. Proper planning can mean the difference between losing everything to long-term care costs and maintaining financial stability for the next generation.
How Monk Law Firm Can Help
At Monk Law Firm, PLLC, we help families in both North and South Carolina understand their Medicaid options and build a plan that makes sense. We take the time to review your income, assets, and long-term care goals, then guide you through strategies to protect what matters most. Whether you are preparing in advance or facing an immediate need, we will work with you to find the right path forward.
If you’re concerned about long-term care costs or want to understand how Medicaid planning fits into your estate plan, we’re here to help. Contact Monk Law Firm, PLLC today to schedule a consultation and take the first step toward protecting your assets and your family’s future.
Frequently Asked Questions
What is the Medicaid asset limit in North and South Carolina?
In both states, applicants can keep only a small amount of countable assets, usually around $2,000 for an individual. Some assets, like your home and personal belongings, may be exempt.
Does the five-year look-back apply in North and South Carolina?
Yes. Both states use a five-year look-back period. If you transfer assets for less than fair market value during that time, you may face a penalty period before becoming eligible.
Can a healthy spouse keep assets if the other spouse needs Medicaid?
Yes. Medicaid has rules to prevent the healthy spouse from becoming impoverished. These allow the healthy spouse to keep certain income and assets, even when the other spouse applies for Medicaid.