Estate Planning | Making a Difference One Family at a Time

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Medicaid planning for active seniorsSince Medicare won’t cover custodial care, Medicaid is a lifeline for seniors looking to address long-term care costs. However, you have to meet strict income and asset limits to qualify, which can leave families concerned about losing their hard-earned savings.

Fortunately, Medicaid planning allows you to structure your finances strategically, ensuring eligibility while preserving assets.

If you live in Connecticut, understanding state-specific Medicaid rules is essential. With proper planning, you can secure long-term care benefits without sacrificing your financial legacy.

Connecticut Medicaid Asset Limits for 2025

To qualify for Medicaid in Connecticut, applicants must meet the following financial criteria:

  • Single Applicant: Must have countable assets below $1,600.
  • Married Applicant (Both Spouses Applying): Must have countable assets below $3,200.
  • Married Applicant (One Spouse Applying): The institutionalized spouse must have countable assets below $1,600, while the healthy spouse (community spouse) can retain half of the couple’s assets up to $157,920.

Additionally, Connecticut allows home ownership exemptions under certain conditions:

  • If the applicant’s primary residence is occupied by a spouse, minor child, or disabled child, it is exempt from Medicaid asset calculations.
  • If the applicant lives alone, the home equity limit is $1,097,000.

Medicaid Planning Trust

Your Medicaid planning strategy can be built around an irrevocable, income-only Medicaid trust. As the name would indicate, you cannot revoke the trust once you establish it, and you surrender access to the principal.

Under the circumstances, that’s a good thing, because the principal would not count if you apply for Medicaid. Meanwhile, you can continue to receive income that is generated by the assets in the trust.

A lot of people have structured their retirement around income-producing assets. For these folks, the conveyance of the principal into a trust is not a hardship because they had no intention of spending it anyway.

The key is to plan ahead effectively because of the five-year look-back period. You have to transfer assets to the trust at least five years before you actually apply for Medicaid.

Medicaid Estate Recovery

As we have stated, a homeowner can qualify for Medicaid with an equity limit of $1.097 million in 2025. However, Medicaid estate recovery will be looming. The program is required to seek reimbursement from recipients after they pass away.

Since you cannot qualify with significant assets in your name, there’s usually nothing for them to take. This dynamic is different if you qualify for Medicaid while you own a home.

With this in mind, you could convey your home into the trust. Your living arrangement wouldn’t change, but the home would be protected from Medicaid estate recovery. It would eventually transfer to the beneficiary you name in the trust declaration.

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Ready to Act?

Our firm can help you create a comprehensive plan that protects your wealth for the benefit of your loved ones. We have estate planning offices in Glastonbury and Westport, Connecticut, and you can call us at 860-548-1000 to schedule a consultation.

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John McCann, Estate Planning Attorney
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