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Milan Vaishnav
Milan Vaishnav, Financial Advisor
Category: Finance
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Experience:  Technical Analyst in Financial Markets -- Experience of more than 10 years in consulting
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What is the legal way to spend down assets before going on

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What is the legal way to spend down assets before going on medicaid? For Indiana law? And can you provide a monetary gift to your children each month? Is that legal?

Dear Friend,


Along with spending down assets, the first thing that you should do is to check whether any of your asset is exempt from medicaid. There are certain items such as your home, some money,etc., which are exempt from medicaid.


The complete details can be had from


Now coming to your main part of question, i.e. legal way of spending down assets.


You can legally spend down but have to follow certain laid down rules. If you have too much income but otherwise would qualify for Medicaid (see categories listed above), you will have to meet a "spend-down" before you will be covered by Medicaid. A spend-down is like a deductible in an insurance policy. It is the amount of medical bills you must have before the insurance company, or DSS in this case, will start to pay. You are responsible for paying the bills you use to meet your spend-down, but they do not have to be paid for your Medicaid eligibility to start.


Spend-downs are calculated for a 6-month period. Once you are found eligible for Medicaid with a spend-down, you will be covered by Medicaid for 6 months.


Your spend-down is figured out by taking the amount your monthly income is over the Medicaid income limit and multiplying it by 6, since every spend-down period lasts for 6 months. The Medicaid income limit depends on the size of your immediate family, where you live, and some other things.


For detail illustration, please refer


A person applying for Medicaid coverage of long-term care must disclose all financial transactions he or she was involved in during a set period of time--frequently called the "look-back period." The state Medicaid agency then determines whether the Medicaid applicant transferred any assets for less than fair market value during this period. Congress does not want a person to be able to give away all of their assets one day and then qualify for public benefits the next.


For Asset Protection, if you are not able to spend down, a creation of Irrevocable trust can also be considered.


Please note that this is a specialized job and thus attorney should be consulted. Since you did not get a proper answer from your attorney, better look for an attorney who has domain knowledge of this area as this is a specialized field.


There are number of ways of legal spend downs but that can be suggested only after ALL your assets are known and studied. So you will have to take help of an attorney, so better find a good local attorney to help you.


The following will be a great help


I hope the above helps...


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