"The Medicaid program will pay for long-term care, but it is a need-based program. To stay within the asset limits, people typically give assets to their loved ones before they apply for coverage. Learn more about medicaid in Indiana in this presentation. "

1. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 1
There are many different facets to consider when you are engaged in your estate
planning efforts. Transferring assets is not always as simple as an exercise in pie
slicing.
You should carefully consider the impact that a direct inheritance can have on
each of your loved ones. If you act in a discerning manner, you can provide for
each person that you love in the optimal fashion.
With this in mind, we will look at the value of special needs trusts in this paper.
MEDICAID COVERAGE
You have probably heard of the Medicaid program. This is a health insurance
“The Medicaid program will pay for long-term care, but it is
a need-based program. To stay within the asset limits,
people typically give assets to their loved ones
before they apply for coverage.”
CAN I GIVE AWAY
ASSETS TO QUALIFY
FOR MEDICAID
IN INDIANA?
PAUL A. KRAFT
Indiana Estate Planning Attorney

2. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 2
You may be unconcerned about future long-term care costs for two reasons. For
one, you may assume that you will never need help with your activities of daily
living. You may also get the impression that Medicare will pay for living
assistance if you ever need it.
Both of these assumptions are false. First off, the United States Department of
Health and Human Services tells us that no less than 70 percent of people
reaching the age of 65 will eventually need long-term care. The future need for
living assistance is a likelihood, not a remote possibility.
Now, let's look at the limitations of Medicare.
Most seniors will qualify for Medicare when they reach the age of 65. You gain
eligibility by earning retirement credits. You can earn up to four credits per year
when you are working and paying taxes. Once you have at least 40 credits, you
will qualify for Medicare once you reach the age of eligibility.

3. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 3
Medicare coverage will certainly help, but this program will not pay for long-term
care. It will pay for up to 100 days of convalescent care, but it will not pay for
custodial care at all.
Most people cannot pay for long-term care comfortably out-of-pocket. We
practice law in the state of Indiana. In our state, the median cost for a year in a
private room in a nursing home exceeds $85,000.
A government study that was conducted a couple of years ago found that the
average length of stay was over two years, and 10 percent of nursing home
residents stay in the facilities for at least five years.
When you put all these facts together, you see a rather compelling picture: Most
people will need long-term care, it is very expensive, and Medicare won't pay for
it.

4. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 4
MEDICAID AND LONG-TERM CARE
You have probably heard of the Medicaid program. This is a health insurance
program for people who have virtually no financial resources. Medicaid will pay
for long-term care.
Many people who were never poor seek Medicaid eligibility late in their lives.
Because it is a program that is intended for financially needy individuals, there
are asset and income limits. As a result, seniors who are angling toward Medicaid
eligibility must divest themselves of assets if they want to qualify.
Can you just give assets to
your family members if you find
out that you need long-term
care? The answer is yes and
no.
You can give away assets after
you find out that you need
long-term care, but if you do,
you won't be able to qualify for
Medicaid right away. There is a
five-year look-back period. If
the program evaluators find
that you have given away
assets within five years of
submitting your application, your eligibility will be delayed.
To explain by way of example, if you gave away enough to pay for two years of
nursing home care, your eligibility would be delayed by two years.
Because of this five-year look-back, if you want to qualify for Medicaid at the
ideal time, you must complete your divestitures at least five years before you
submit your application. Otherwise, long-term care costs will consume some or
all of the inheritances that you intended to leave behind to your children.

5. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 5
MEDICAID PLANNING STRATEGIES
Elder law attorneys assist clients who are concerned about long-term care costs.
If you discuss your
unique personal
situation with an elder
law attorney, you can
devise a strategy that
leads to Medicaid
eligibility.
Your assets will
remain in the family,
and you will get the
care that you need if
you do in fact need
long-term care at
some point in the
future.

6. Can I Give Away Assets to Qualify for Medicaid in Indiana? www.FrankKraft.com 6
SUMMARY
Medicare does not pay for long-term care, and most seniors will someday need
help with their activities of daily living. This care is very expensive, so the gap is
considerable.
The Medicaid program will pay for long-term care, but it is a need-based
program. To stay within the asset limits, people typically give assets to their
loved ones before they apply for coverage.
However, this is tricky, because you are penalized and your eligibility is delayed if
you give away assets within five years of applying for Medicaid.
Legal advice is invaluable if you want to qualify for Medicaid without losing a
great deal in the process. Schedule a consultation with a licensed elder law
attorney if you would like to obtain in-depth information about Medicaid
planning.
REFERENCES
Genworth Financial
https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-
of-care.html
LongTermCare.gov
http://longtermcare.gov/

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About the Author
Paul A. Kraft
Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms
in Indiana in the area of estate planning as well as business and tax planning.
Mr. Kraft assists clients primarily in the areas of estate
planning and administration, Medicaid planning, federal and
state taxation, real estate and corporate law, bringing the
added perspective of an accounting background to his work.
In addition to his practice, Mr. Kraft has lectured extensively
in the areas of living trust planning, Medicaid planning, and
presenting public and private seminars on the importance of
proper estate planning. He has also authored various articles
on estate planning and is a contributing author of LEGACY:
Plan, Protect, and Preserve Your Estate–Practical Answers
from America’s Foremost Estate Planning Attorneys.
Mr. Kraft is a co-founder of the Indiana Network of Estate
Planning Professionals, a charter member of the American Academy of Estate Planning
Attorneys and a founding member of the National Network of Estate Planning Attorneys. He is
also a member of the Indianapolis Bar Association, including the Taxation, Business Law and
Estate Planning sections; the Indiana State Bar Association, including the section on Taxation
Law; the Indiana CPA Society; and the Estate Planning Council of Indianapolis. Mr. Kraft is
admitted to practice law before the Supreme Court of Indiana, U.S. District Courts, and U.S.
Tax Court.
Frank & Kraft
A Professional Corporation
Attorneys at Law
www.FrankKraft.com
135 N. Pennsylvania Street Suite 1100
Indianapolis, IN46204-2485
Phone: (317) 684-1100
Fax: (317) 684-6111