Indianapolis Medicaid Planning Attorney | Asset Protection

Indiana Medicaid Planning & Asset Protection

Medicaid planning protects your assets while maintaining eligibility for long-term care coverage. Indiana’s five-year look-back period, income and resource limits, and spousal protections create complex rules that determine how much of your estate you preserve. Strategic planning through trusts, spend-down strategies, and proper document structure can legally protect hundreds of thousands of dollars while securing the Medicaid coverage your family needs.

Why Medicaid Planning Matters

A nursing home in Indiana costs between $8,000 and $12,000 per month. For couples, one spouse’s illness can drain a lifetime of savings in just a few years, leaving the other spouse impoverished. Medicaid covers long-term care costs but only if you meet strict asset and income limits. Without planning, families either pay out-of-pocket until resources are exhausted, or lose assets to pay for care that could have been covered.

Medicaid planning isn’t about hiding money or committing fraud. It’s about structuring your finances legally so that legitimate Medicaid benefits protect what you’ve accumulated. Indiana Code Section 29-1-2-107 sets the framework, but the rules are intricate. The state’s five-year look-back period, spousal resource protections, and spend-down thresholds require precise timing and documentation.

The difference between planning now and waiting until a crisis hits can be $200,000 to $500,000 in preserved assets. Families who plan ahead keep their homes, preserve inheritances for children, and protect a surviving spouse’s security. Those who wait often lose everything.

Indiana’s Medicaid Rules

The Five-Year Look-Back Period

When you apply for Medicaid, the state examines all asset transfers you made in the five years before applying. Gifts, transfers to family members, or funding trusts during this period can delay or disqualify your application. However, certain transfers (gifts to spouses, for medical expenses, to disabled children) don’t trigger penalties. Strategic planning positions your transfers outside this window or uses permitted structures.

Asset and Income Limits

For unmarried individuals, Indiana limits countable assets to $2,000 for Medicaid eligibility. Your home, one vehicle, and certain retirement accounts don’t count, but bank accounts, investment accounts, and other liquid assets do. For married couples, the spouse NOT applying for Medicaid (the “community spouse”) can retain significantly more assets — up to $148,020 in 2025 — protecting the well spouse’s quality of life.

Irrevocable Trusts & Asset Protection Strategies

An irrevocable trust created and funded more than five years before a Medicaid application removes assets from your countable estate, protecting them from long-term care costs. Indiana Legacy Trusts (Indiana Code Section 30-4-11-20) or other estate planning tools may allow you to protect assets while maintaining some control. If properly structured, the assets don’t count toward Medicaid limits, even if you eventually apply. The key is timing — two years is not enough; five years is the threshold for full protection.

Spousal trusts work differently. The community spouse can protect resources using trust structures that segregate marital assets, ensuring one spouse’s Medicaid need doesn’t impoverish the other.

How We Help

Our Medicaid planning process starts with understanding your assets, family situation, and long-term care concerns. We conduct a comprehensive asset review, calculate your look-back implications, and design a strategy tailored to your situation. For some families, an irrevocable trust funded now protects assets for future care needs. For others, a combination of legal structures and spend-down planning maximizes Medicaid benefits while preserving family legacy.

We guide you through the application process, coordinate with your accountant and financial advisor, and ensure every document meets Indiana requirements. If you’re already in a crisis — facing imminent long-term care — we explore remaining options and crisis planning strategies. If you’re planning ahead, we build structures that protect decades of work.

The families we work with sleep better knowing their plan is legal, documented, and defensible. They’ve taken action before a crisis, which means choices remain in their hands, not the state’s.

Frequently Asked Questions

What does Medicaid cover in Indiana?

Indiana Medicaid covers nursing home care, assisted living facilities, and home-based care services for eligible individuals. Once you meet eligibility requirements (countable assets under $2,000 for individuals, income under the Medicaid limit), the program covers long-term care costs. However, there are strict rules about what you own and how you became eligible — which is where planning becomes critical.

What is the five-year look-back period, and why does it matter?

The look-back period examines all asset transfers in the five years before you apply for Medicaid. Transfers without a legitimate reason (such as paying for care, gifting to a disabled child, or transferring to a spouse) can disqualify you temporarily. The penalty period is calculated by dividing transferred assets by Indiana’s monthly average cost of nursing home care. Strategic planning ensures transfers either happen outside the look-back window or use approved structures that don’t trigger penalties.

Can I protect my home and still qualify for Medicaid?

Yes. Your primary residence is an exempt asset, meaning it doesn’t count toward the $2,000 limit. However, your home may be subject to a lien after you receive Medicaid benefits, allowing the state to recover costs from your estate after you pass. Protecting your home from Medicaid liens requires advance planning, such as transferring it to a spouse, disabled child, or properly structured trust before you need care.

What is a Medicaid-friendly trust, and how does it work?

A properly structured irrevocable trust, funded more than five years before Medicaid application, protects assets by removing them from your countable estate. These assets then don’t count toward Medicaid limits, even if you eventually need long-term care. The tradeoff is that you give up control of those assets in the trust. Other planning tools might provide a middle ground, allowing you some control while still achieving protection.

How does Medicaid planning work for married couples?

Medicaid rules treat married couples differently. If one spouse needs Medicaid, the other (the community spouse) can retain significantly more assets without affecting eligibility. Spousal protections allow the well spouse to live securely while the ill spouse qualifies for coverage. We structure assets and trusts to maximize this protection, ensuring one spouse’s health crisis doesn’t impoverish the other.

Connect to Elder Law Planning

Medicaid planning works best as part of a comprehensive elder law strategy. It connects to long-term care planning (determining when and where you’ll receive care), guardianship preparation (establishing power of attorney before capacity issues arise), and estate planning (ensuring your will or trust aligns with your Medicaid strategy). Families who see all these pieces together make better decisions and face fewer surprises.

Ready to Protect Your Family’s Assets?

Long-term care planning is too important to delay. Whether you’re concerned about future care costs, want to protect your spouse’s security, or need help navigating Medicaid rules, we’re here to guide you. We offer a free initial consultation where we listen to your situation and explain your options in plain language.