Just as we all made plans about whether we wanted to go to college, what college we wanted to go to, and how we would pay for it, so too, as we age, we need to plan for retirement and beyond, when that time comes to pass. Long-term care and, ultimately passing on, is an inevitable part of life, and coming up with a game plan can make a world of a difference.

Senior Planning Services, a NJ-based company dedicated to assisting seniors and their families through the difficult Medicaid eligibility process, shares some important long-term care and end-of-life planning know-how.

What are Medicaid ‘Countable Assets’?

There are many assets that are included in Medicaid ‘countable assets’, meaning, assets that Medicaid will count towards the individual’s eligibility. Eligibility is determined state by state, and it would be beyond the scope of this article to cover each individual state, but here are the general guidelines of what assets may be counted:

  • Checking accounts
  • Savings accounts
  • CD accounts
  • Money market Accounts
  • Stocks
  • Bonds
  • Mutual funds
  • IRAs
  • 401(k)’s
  • Vacation homes
  • Life insurance policies with a face value of $1500 or more


What are Medicaid ‘Excludable Assets’?

There are many assets that are Medicaid exempt and do not count towards Medicaid eligibility. Here’s a list of some common ones:

  • The primary residence (in some cases)
  • Furniture
  • Clothing
  • One vehicle
  • Personal possessions
  • Irrevocable Prepaid funeral
  • Burial plot fund
  • Special needs trust
  • Holocaust reparations payments
  • Life insurance policy with no cash value or a face value of less than $1500


Irrevocable trusts that can help you

As mentioned, an irrevocable trust fund is considered ‘excludable assets’ for Medicaid eligibility. An irrevocable trust fund is one that cannot be revoked even by the creator of the fund, the “Grantor”, and the funds are considered inaccessible and are therefor not ‘countable assets’.

This type of fund is as opposed to a revocable fund, where, as the name suggests, can be rescinded or changed by the grantor, and as such, the assets are considered ‘countable assets’ for Medicaid eligibility. It is important to note that after the death of the Medicaid recipient, any funds remaining in the fund will need to be relinquished to fund any Medicaid payouts.

Now let us discuss the details of some of the trust funds that we mentioned:

Prepaid funeral trust: It is important to set up an irrevocable fund for funeral expenses, for several reasons;

  • So the funds will be available when the time comes and the funeral expenses will not fall on one’s loved ones to shoulder. (In certain instances, in some states, government assistance is available to cover a very basic funeral.)
  • One gets to choose the type of funeral and burial arrangements they desire.
  • The funds that are designated for this specific purpose will not hinder one’s Medicaid eligibility for long-term care.

Special needs trust: If the Medicaid recipient has a special needs child, they can set up a special needs irrevocable trust fund, which, like the funeral fund, is not rescindable and supplements for the expenses of this child that are not covered by government assistance programs. Again, this fund needs to be set up as an irrevocable trust in order for the funds not to hurt one’s Medicaid eligibility.


As one can see, there are many details to educate oneself on when considering Medicaid-sponsored long-term care. Being armed with the right information, is the difference between achieving successful long-term care and achieving almost-successful long-term, which is just not good enough for yourself or your loved one.

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