The Medicaid and Long-Term Care Planning Toolkit

Healthcare > Medicaid and Long-Term Care | Published 25 February 2026 - Updated 12 August 2026 | UpLaw - uplaw.us

Complete Module 1 before using anything else in this toolkit. Every number in Medicaid long-term care is set by state, and most of them change annually.

Keywords: state variables, assets, transfers, spend-down, care agreements, hearings, recovery

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Module 1 — State variables worksheet

Fill this in first. Put it on the first page of the file.

State: ______

1. Income treatment: ☐ Income-cap (a qualified income trust is required) ☐ Medically needy / spend-down Income limit: $______ Personal needs allowance: $______

2. Retirement accounts: ☐ Balance countable ☐ Exempt in payout status, distributions counted as income

3. Estate recovery definition: ☐ Probate estate only ☐ Expanded — any interest held at death (If expanded: a revocable trust protects nothing. Say so before anyone pays for one.)

4. Home equity limit: $______

5. Individual resource limit: $______

6. Community spouse resource allowance: minimum $______ maximum $______ (adjusts annually)

7. Minimum monthly maintenance needs allowance: $______ Excess shelter standard: $______ (adjusts annually)

8. Average monthly private-pay nursing facility cost: $______ (the divisor in the penalty formula)

9. Waiver programs under 42 U.S.C. § 1396n: ______ Waiting list: ______

10. Fair hearing deadline: ______ Continuation-of-benefits window: ______ days

Why this module comes first. The federal structure at 42 U.S.C. § 1396a is uniform. Every figure above is local. Advising from another state's numbers is the most common source of confident error in this field.

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Module 2 — Asset classification sheet

Asset	How titled	Value	Countable	Exempt	Notes
Home				☐	Equity vs. limit; intent to return; who resides there
Second property			☐
Vehicle 1				☐	One vehicle exempt
Vehicle 2			☐
Checking / savings			☐
Investments			☐
Retirement accounts			?	?	State-dependent — see Module 1
Life insurance		face $___ cash $___	☐	☐	Exempt below face threshold
Burial fund / prepaid contract				☐	Must be irrevocable
Burial spaces				☐
Household goods, personal effects				☐
Property essential to self-support				☐	Within limits
Annuities					Must satisfy 42 U.S.C. § 1396p conditions
Trusts					Analyze individually
TOTAL COUNTABLE		$______

Target: reduce countable resources to $______ (individual limit) or, if married, to the limit after the community spouse takes their allowance. Amount to eliminate: $______

The two lines that most often decide the case: the retirement account row, and the home's equity against the state limit.

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Module 3 — Transfer inventory and penalty calculator

Ask the question neutrally: "Has anyone been given anything of value in the last five years?"

Then prompt for each of these, because families do not think of them as transfers:

Cash gifts · tuition or wedding payments · help with a down payment · adding a name to a deed or a bank account · forgiven loans · below-market sales · transfers into a trust · and payments to a family caregiver without a written agreement.

Date	Recipient	Asset / amount	Value received back	Uncompensated	Exception claimed
TOTAL UNCOMPENSATED				$______

Penalty calculation:

Total uncompensated: $______ ÷ state average monthly cost (Module 1, line 8): $______ = penalty period of ______ months Begins: when the applicant is otherwise eligible and receiving institutional care — not when the transfer was made.

Exceptions to check for each transfer, under 42 U.S.C. § 1396p:

☐ To a spouse, or for the sole benefit of a spouse ☐ To a child who is blind or has a permanent and total disability, or to a trust for their sole benefit ☐ Home to a child under 21, or to a child who is blind or disabled ☐ Home to a sibling with an equity interest who resided there ≥ 1 year before institutionalization ☐ Home to a caretaker child — resided ≥ 2 years immediately before institutionalization and provided care that permitted the parent to remain at home ☐ Transferred exclusively for a purpose other than qualifying ☐ Assets returned in full

And if none applies: ☐ Undue hardship waiver (Module 8).

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Module 4 — Spend-down plan template

Spending money on things is not a transfer. There is no penalty for receiving fair value.

Expenditure	Amount	Status
Mortgage payoff	$______	☐
Credit cards / auto loans	$______	☐
Outstanding medical bills	$______	☐
Roof / HVAC / plumbing / electrical	$______	☐
Accessibility: ramp, grab bars, walk-in shower, stair lift, doorways	$______	☐
Replacement vehicle	$______	☐
Irrevocable prepaid funeral — applicant	$______	☐
Irrevocable prepaid funeral — family members (where permitted)	$______	☐
Needed household goods and personal effects	$______	☐
Care already received	$______	☐
Legal, accounting, care management fees	$______	☐
Transfer to community spouse up to the allowance	$______	☐
TOTAL	$______

Two timing rules.

Resources are measured at the first moment of the month. A balance above the limit on day one generally disqualifies for the whole month.

Keep every receipt. The spend-down will be verified.

And one prohibition, in bold, at the bottom of the page: no gifts. A dollar spent on the applicant's own home, debt, or care is a dollar removed with full value received. A dollar given away is a penalty.

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Module 5 — Personal care agreement: essential terms

Execute before any payment. A retroactive agreement will not be respected, and the payments already made remain gifts.

Parties. [Care recipient] and [caregiver], stating the relationship.

Recitals. The recipient requires assistance with [specific activities of daily living]. The caregiver is able and willing to provide it. The parties intend this to be an arm's-length agreement for services at fair market value, not a gift.

Services. Itemized: personal care · meal preparation · medication reminders · transportation to appointments · housekeeping · laundry · shopping · companionship · care coordination. With frequency and expected hours.

Compensation. $[] per hour, or $[] per month for [___] hours. Supported by documentation of what a home care agency charges in this area — attach the quotes.

Payment. [Weekly / monthly], by check or electronic transfer, traceable, beginning [date]. No lump sums and no prepayment for future years.

Records. The caregiver will maintain a contemporaneous log of dates, hours, and services provided, available to the recipient and to any agency on request.

Taxes. The caregiver will report the payments as income.

Term and termination. [Term], terminable by either party on [___] days' notice or on the recipient's institutionalization or death.

The four requirements that make it work: in advance · at a market rate · services documented contemporaneously · payments traceable and reported.

Why this module matters more than its length suggests. A child who leaves employment to care for a parent, paid from the parent's account without an agreement, has created a penalty period the family cannot afford. The same money, the same care, one document — and an entirely different outcome.

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Module 6 — Resource assessment request

For a married couple. The snapshot fixes the community spouse's protection for the entire case.

Re: [institutionalized spouse] and [community spouse]

I request a resource assessment under 42 U.S.C. § 1396r-5, as of [date] — the beginning of the first continuous period of institutionalization of at least thirty days.

Enclosed is documentation of all countable resources held by both spouses as of that date, itemized at Tab [___].

Please confirm in writing:

1. Total countable resources as of the snapshot date: $______
2. The community spouse resource allowance: $______
3. The amount the institutionalized spouse must spend down: $______
4. The minimum monthly maintenance needs allowance for the community spouse, including the excess shelter allowance: $______
5. Whether income must be diverted from the institutionalized spouse to reach that allowance, and in what amount.

Two notes. The assessment can be requested before an application is filed. And the snapshot date is frequently within some control — worth discussing before it happens rather than after.

Community spouse allowance worksheet

Community spouse's own monthly income: $______ Minimum monthly maintenance needs allowance: $______ Excess shelter allowance: $______ Total allowance: $______ Shortfall: $______

If there is a shortfall: income is diverted from the institutionalized spouse before anything goes to the facility.

If the standard resource allowance, invested at prevailing rates, will not generate income sufficient to close the shortfall: request a fair hearing to increase the resource allowance (Module 7). Available, granted, and almost never requested.

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Module 7 — Fair hearing request

Re: [applicant] · Case [] · Notice dated []

I request a fair hearing under 42 C.F.R. Part 431.

[Where benefits exist] This request is made within the period during which benefits continue pending the hearing, and I request that benefits continue.

Issues:

1. [The transfer penalty determination — the applicable exception under 42 U.S.C. § 1396p, the purpose of the transfer, and the return of assets; in the alternative, undue hardship.]
2. [The classification of [asset] as a countable resource — exemption, valuation, and availability.]
3. [The level-of-care determination, with a physician's statement addressing the specific criteria at Tab ___.]
4. [An increase in the community spouse resource allowance under 42 U.S.C. § 1396r-5.]
5. [The failure to act with reasonable promptness under 42 C.F.R. Part 435.]

I request the complete case file in advance, including every document the agency intends to rely upon, and that the hearing be recorded.

Three rules for the hearing itself.

Everything on the record — the hearing record is the record on judicial review.

Documents, not assertions — bank records, physician statements, care logs, the personal care agreement.

Preserve every objection with its ground.

The constitutional backdrop: Goldberg v. Kelly, 397 U.S. 254 (1970) and Mathews v. Eldridge, 424 U.S. 319 (1976).

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Module 8 — Undue hardship waiver request

Re: [applicant] · Transfer penalty of [___] months imposed [date]

I request an undue hardship waiver.

1. The transferred assets are unrecoverable. [Describe the transfers, the recipients, and the efforts made to recover them, with correspondence at Tab A.]

2. The applicant has no remaining resources. [Financial documentation, Tab B.]

3. Denial deprives the applicant of necessary medical care. [Facility's letter stating it cannot continue care without payment, Tab C.] [Physician's statement as to the applicant's condition and the consequences of discharge, Tab D.]

4. Denial deprives the applicant of shelter. [The applicant has no alternative residence — explain.]

The standard is met: denial of eligibility would deprive the applicant of medical care such that health or life would be endangered, and of shelter and other necessities of life.

Every state must have a hardship waiver process. It is granted. It must be requested, and it requires the facility's own letter — which the facility will provide, because it wants to be paid.

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Module 9 — Estate recovery response

Re: Estate of [decedent] · Recovery claim dated [] · $[]

1. Verification. Please provide an itemization of the benefits paid, by date and service, and confirm that the claim is limited to services provided at or after age fifty-five.

2. [Where applicable] Recovery is prohibited. The decedent is survived by [a spouse / a child under twenty-one / a child who is blind or has a permanent and total disability], as documented at Tab A.

3. [Where applicable] Recovery must be deferred. [A sibling with an equity interest / a caretaker child] resides in the property and satisfies the statutory conditions, as documented at Tab B.

4. [Where applicable] Hardship waiver. The estate is the sole income-producing asset of the survivors / the property is of modest value / recovery would cause [survivor] to require public assistance. Documentation at Tab C.

5. Scope. [Where a tort recovery is involved] Any claim is limited under Ahlborn and Gallardo to the portion of the settlement allocated to medical expenses, which was $[___] per the [settlement agreement / court order] at Tab D.

Calendar the response deadline the day the notice arrives.

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Module 10 — Power of attorney language checklist

The single most important document in long-term care planning. A general power without these provisions cannot do the work.

The authority that must be express:

☐ To make gifts, including gifts exceeding the annual exclusion amount, to any person including the agent ☐ To create, amend, revoke, and fund trusts, including irrevocable trusts ☐ To transfer assets between spouses, and to a trust for the sole benefit of a spouse ☐ To apply for and pursue government benefits, including Medicaid, and to appeal denials ☐ To create a qualified income trust and to fund it ☐ To purchase annuities and to designate remainder beneficiaries as required by 42 U.S.C. § 1396p ☐ To change beneficiary designations ☐ To disclaim interests ☐ To enter a personal care agreement and compensate a caregiver, including the agent ☐ To convey or transfer real property, including the residence ☐ To access records and information, with a HIPAA authorization

Two drafting notes.

"Including the agent" matters. Many statutes and many courts will not read a general gifting power to permit gifts to the agent, which defeats the most common planning arrangement of all — a transfer to the well spouse who is also the agent.

Effective immediately or on incapacity? A springing power requires a capacity determination that takes time exactly when time is short. Immediate effectiveness is usually the better choice for a client who trusts the agent.

What happens without it: guardianship or conservatorship — public, slow, expensive, and supervised. See Petitioning for Guardianship or Conservatorship: A Practical Checklist and Elder Law: A Comprehensive Guide to Incapacity Planning, Medicaid, and Guardianship.

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Module 11 — Admission agreement review

Read every page. Then strike.

☐ Any third-party guarantee of payment. A facility may not require a family member to guarantee payment as a condition of admission. Strike it, and do not sign as "responsible party" without limiting the capacity to that of an agent using the resident's funds. ☐ Any arbitration clause — evaluate before signing; it is generally not a condition of admission. ☐ Any waiver of the right to remain on conversion to Medicaid. ☐ Any waiver of liability for injury or negligence. ☐ Any provision permitting transfer or discharge on grounds broader than the statute allows. ☐ Any obligation to apply personal funds beyond the personal needs allowance. ☐ Confirm the facility participates in Medicaid and will accept Medicaid on conversion. ☐ Confirm bed-hold policies during hospitalization. ☐ Confirm the personal funds account arrangements and the accounting the resident is entitled to.

The rights themselves are at 42 U.S.C. § 1396r and 42 C.F.R. Part 483: freedom from unnecessary physical and chemical restraints · participation in care planning · privacy and dignity · grievances without retaliation · and protections against improper transfer and discharge.

And they are federally enforceable under 42 U.S.C. § 1983 after Health and Hospital Corporation of Marion County v. Talevski, 599 U.S. 166 (2023) — which matters most when a facility tries to discharge a resident on conversion to Medicaid.

Before litigating, call the long-term care ombudsman. Free, independent, and effective.

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Module 12 — Reference tables

Authorities

Authority	Proposition
42 U.S.C. § 1396 · § 1396a	The program; state plan requirements
42 U.S.C. § 1396b · § 1396d	Payments; covered services
42 U.S.C. § 1396n	Waivers — home and community based services
42 U.S.C. § 1396p	Transfers, penalties, liens, estate recovery
42 U.S.C. § 1396r	Residents' rights
42 U.S.C. § 1396r-5	Spousal impoverishment
42 U.S.C. § 1320a-7b	Kickbacks and referrals
42 U.S.C. § 12101 · § 12132 · § 1983	ADA; enforcement
42 C.F.R. Part 431 · Part 435 · Part 483	Hearings; eligibility; facilities
Goldberg · Mathews	Process due before termination
Olmstead	Community integration
Ahlborn · Gallardo	Reach of a state claim against a tort settlement
Wilder · Blessing · Gonzaga · Douglas	§ 1983 enforcement, narrowed
Talevski	Residents' rights enforceable under § 1983

Deadlines

Item	Timing
Personal care agreement	Before any payment
Power of attorney	While capacity exists
Waiver waiting list	As early as possible
Snapshot / resource assessment	First 30-day institutionalization
Look-back	60 months before application
Retroactive coverage	Limited period before the application month
Appeal of denial	State deadline
Appeal of termination or reduction	~10 days for benefits to continue
Estate recovery response	As stated in the notice

Vocabulary

Countable vs. exempt resources. Snapshot — the date fixing the community spouse allowance. CSRA — community spouse resource allowance. MMMNA — minimum monthly maintenance needs allowance. Spend-down — converting countable resources to value received; not a transfer. Look-back — sixty months of examined transfers. Penalty period — months of ineligibility, beginning when otherwise eligible and receiving care. QIT / Miller trust — the income-cap state solution. HCBS waiver — home and community based services. Estate recovery — the claim after death, narrow or expanded by state. Personal needs allowance — what the recipient keeps.

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Module 13 — Where this connects

The narrative and the doctrine. Six Thousand Dollars a Month: How Families Actually Pay for Long-Term Care · Medicaid and Long-Term Care: A Comprehensive Guide to Eligibility, Transfers, Estate Recovery, and Appeals · Paying for Long-Term Care: Medicaid's Five-Year Look-Back and the Planning It Permits.

The step-by-step. Applying for Medicaid Long-Term Care Coverage: A Practical Checklist.

Elder law and incapacity. Elder Law: A Comprehensive Guide to Incapacity Planning, Medicaid, and Guardianship · Petitioning for Guardianship or Conservatorship: A Practical Checklist · The Elder Law and Incapacity Planning Toolkit.

Estate planning and recovery. Wills, Trusts, and Probate: A Comprehensive Estate Planning Guide · The Estate Planning and Wealth Transfer Toolkit · The Trust Administration and Fiduciary Litigation Toolkit.

Coverage appeals on a different track. Denied: What to Do When a Health Plan Says No · Health Coverage Denials and Appeals: A Comprehensive Guide to ERISA Plans, Marketplace Coverage, and Medicare · Appealing a Health Insurance or Medicare Denial: A Practical Checklist · The Health Coverage Appeal Toolkit.

The administrative framework. Administrative Law: A Comprehensive Guide to Agency Action and Judicial Review and The Administrative Law Toolkit.

Where an injury caused the need for care. Documenting and Presenting a Car Accident Claim: A Practical Checklist and The Auto Injury and Insurance Claim Toolkit — allocate medical and non-medical damages in the settlement.

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Module 14 — Adjacent problems in the same file

An elderly client with a long-term care problem almost always has three or four other legal problems that nobody has asked about.

Financial exploitation. An older adult whose assets have moved in ways the family cannot explain may be the victim of a scam or of exploitation by a relative or caregiver — and the resulting transfers will be treated as gifts under 42 U.S.C. § 1396p unless the exploitation is documented and pursued. See Consumer Fraud and Financial Exploitation: A Comprehensive Guide to Prevention, Recovery, and Remedies and The Fraud Response and Financial Exploitation Toolkit. This is the single most common source of unexplained look-back transfers.

Veterans benefits. A wartime veteran or a surviving spouse may qualify for an aid and attendance benefit that pays toward care, with its own eligibility rules that interact with Medicaid planning. See Veterans Benefits: A Comprehensive Guide to Service Connection, Ratings, and Appeals and The Veterans Benefits Claim and Appeal Toolkit. Ask every client whether they or their spouse served.

Debt and collection. Medical debt, credit card debt, and collection lawsuits frequently accompany a long-term care crisis, and retiring them is legitimate spend-down. See Disputing a Credit Report Error and Defending a Debt Collection Suit: A Practical Checklist and The Consumer Debt and Credit Reporting Toolkit.

Housing. Where the applicant rents rather than owns, the tenancy has its own rules and its own deadlines during a hospitalization or a facility stay.

And a will that no longer matches the plan. After a spend-down, a resource transfer to a community spouse, and a change in beneficiary designations, an unrevised estate plan can undo everything — most acutely where the community spouse dies first leaving everything outright to the institutionalized spouse.

The intake question that surfaces all five: what else has changed in this family's life in the last two years?

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Related Documents

Articles

• Six Thousand Dollars a Month: How Families Actually Pay for Long-Term Care
• Paying for Long-Term Care: Medicaid's Five-Year Look-Back and the Planning It Permits

Guides

• Medicaid and Long-Term Care: A Comprehensive Guide to Eligibility, Transfers, Estate Recovery, and Appeals
• Elder Law: A Comprehensive Guide to Incapacity Planning, Medicaid, and Guardianship

Checklists

• Applying for Medicaid Long-Term Care Coverage: A Practical Checklist
• Petitioning for Guardianship or Conservatorship: A Practical Checklist

Toolkits

• The Elder Law and Incapacity Planning Toolkit
• The Estate Planning and Wealth Transfer Toolkit