We recently received a question from a listener of our radio show. Her husband was in poor health, and she had gone to see a local attorney to ask what would happen to their home if he needed nursing home care. The attorney told her, without hesitation, that there was nothing she could do. She would just have to accept the $12,000 monthly nursing home bill and that asset protection wasn’t possible.
She wasn’t so sure.
She had heard something different elsewhere, so she called and asked plainly, “You can’t protect your assets?” And the answer was yes, you can, especially when you understand the type of assets you have.
What the Law Actually Says
This isn’t about opinions or sales pitches. The law, starting at the federal level, clearly defines what types of assets are protected when someone goes into a nursing home. Medicaid is a federal program, and each state must follow its rules. In Georgia, those rules are administered by the Georgia Department of Community Health. They can’t just make up their own version. State law must align with federal law.
For example, your home is protected. So are your retirement accounts like IRAs, 401(k)s, and 403(b)s. Your personal property, vehicles, term life insurance, and certain types of fixed immediate annuities are also protected. This applies whether you’re single or married, and these protections exist regardless of whether or not you have a trust in place. A trust may help with other aspects of estate planning, but it is not required for these protections.
For married couples, there is an additional layer of protection called the Community Spouse Resource Allowance (CSRA). This allows the spouse who is not in the nursing home to keep a certain amount of bank accounts and liquid assets. In 1995, the CSRA was $62,000. In 2025, it’s $160,000. That’s a significant change in the right direction. And yet, the list of protected assets has otherwise stayed the same.
Why You May Hear Otherwise
So why do some attorneys still tell clients they can’t protect anything? There could be several reasons. Maybe they don’t work in elder law. Maybe they don’t want to deal with the specifics of Medicaid rules. Or maybe they assume most clients won’t ask follow-up questions. Instead of referring someone to a lawyer who does understand the rules, they offer a simple answer and move on to what they know, which is usually drafting a will.
But a will doesn’t protect your assets during your lifetime. And it certainly doesn’t help you avoid a Medicaid spend down. Worse, some people are told the only way to protect their assets is to
give up ownership by transferring their home to their children or placing it into an irrevocable trust. That move can backfire if it triggers the Medicaid look-back penalty. If you transfer assets and then need care within five years, Medicaid will count that transfer against you. You could end up disqualified for benefits right when you need them.
Even after the five-year period, giving up ownership still means giving up control. Do you want to be in a position where you need someone else’s permission to live in your home, access your money, or sell your property? That’s not protection, that’s restriction.
What Really Works
The better approach is to understand which assets are already protected and to keep ownership of those assets. You don’t need to give away your home to protect it. You don’t need a trust to protect your retirement account. The law already does that for you as long as you don’t give up control.
Yes, some strategies involving trusts can be helpful in some cases. But they are not the starting point. The starting point is understanding the type of asset you have. From there, you can make decisions that work for your situation without risking penalties, loss of access, or unnecessary worry.
If you want a clearer path forward, J. Kevin Tharpe, PC, can help. We’ll walk you through which assets are protected, what steps are available now, and how to plan ahead with confidence. Contact our office to get started.
Kevin Tharpe
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