# Medicaid Spend Down Planning in North Carolina | Cary Estate Planning [Call Now Click Here](tel:919-659-8433) Click [HERE](https://caryestateplanning.com/contact-us/) to speak with NC’s trusted statewide Estate Planning, Probate, and Special Needs Planning Law Firm! ![Older Doctor with File](https://caryestateplanning.com/wp-content/uploads/2017/10/pexels-gustavo-fring-4173239.jpg) # Medicaid Spend Down Planning in North Carolina Table of Contents Toggle Cary, NC Elder Law Attorney A common question from potential clients desperately trying to navigate the Medicaid Long-Term Care minefield is “do I need to spend all of my parent’s assets in order to have them qualify for Medicaid?” This is a very common misconception among people who are new to Medicaid application process. Many people think “Spend Down” means “spend all of the money” – but Spend Down planning actually involves ***converting*** assets, not necessarily ***wasting*** them. ## Countable and Non-Countable Assets At a very basic level, Medicaid eligibility requires both that a person be disabled, and that they have assets worth less than $2,000 in total value. Many people think this means ***all asset***, when it actually only refers to ***countable assets***. So, what are Medicaid Countable Assets? Countable assets generally refers to things that can and should be used to pay for the applicant’s own medical care – most often cash and cash equivalents, stocks, bonds, etc. But it also includes a second home, a second car, retirement assets, cash-value life insurance, and other assets that could be liquidated without leaving the applicant homeless and without support. Medicaid always wants to be the payer of last resort, so to the extent and individual has these resources, and the resources are ***available to the applicant***, Medicaid will count these assets against the applicant’s $2,000 asset limit. Non-countable assets will generally include things like the primary residence (equity up to approximately $560,000 if the applicant intends to return home at some point – this is a ***subjective standard***), one car (no value limit), pre-paid funeral plan, assets that cannot be sold (like a timeshare), household furnishings (must be reasonable), personal effects and clothing (also must be reasonable), etc. ### Converting Countable Assets to Non-Countable Assets While one way to reduce your loved one’s assets is to spend them all in a very literal sense – think vacations, gambling, eating out every night, etc., the better strategy is to convert countable assets to non-countable assets. For example, if an individual has $100,000 in cash in their checking account, they would be ineligible for Medicaid because they have well over the asset limit for eligibility. But, if they took $50,000 and renovated their kitchen and back porch, and spent the other $48,000 (leaving $2,000 in cash) on a new car (while also trading in an existing car), the applicant would again be eligible for Medicaid Long-Term Care. Rather than wasting the excess funds, they are enjoying the benefit of those assets or allowing others to enjoy the benefit while they are in a skilled nursing facility. ### Don’t Gift as a Crisis Strategy While Spending Down is a very useful crisis planning strategy (planning for Medicaid eligibility following an unexpected illness or injury which renders the applicant disabled), gifting should never be part of a crisis planning strategy. Gifting is the giving away of assets to others in an attempt to reduce a person’s assets below the required threshold. However, Medicaid penalized gifts made for the purpose of obtaining Medicaid eligibility if the gift is made within five (5) years of the date of application. Gifting should only be used as an advance planning strategy well before the need will arise. Applicants will be penalized one month of eligibility for every $6,500 in value they gift during the “Five Year Look Back Period.” ### Consult an Experienced Elder Law Attorney Don’t take Medicaid planning lightly. These sorts of complex planning strategies should not be attempted without proper legal guidance. Contact an experienced elder law attorney in Cary, NC today if your loved one is in need of Medicaid planning. ### Author Bio ![James P. Kelly, ESQ](/wp-content/uploads/2026/05/Paul-Yokabitus.jpg) **Paul Yokabitus** Founder & Estate Planning Lawyer Paul Yokabitus is the founder of Cary Estate Planning, where he helps North Carolina families protect what matters most through wills, trusts, probate, and special needs planning. Known for his “planning, not paperwork” approach, Paul turns complex legal concepts into clear, practical strategies so clients feel informed and confident at every step. He has been recognized as a Business North Carolina Legal Elite attorney and a Super Lawyers Rising Star, and was named to the Triangle Business Journal’s 40 Under 40. A graduate of Campbell University School of Law, Paul lives in the Triangle with his wife, Alix, and their two sons. 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They value their clients and go above and beyond to make sure that no details are missed. I would highly recommend Paul to anyone looking to create an estate plan. Marylin I was referred to Paul by my Real Estate Attorney and I could not say enough about how exceptional the client service has been from everyone I spoke to. The communication is prompt and I feel like they really took the time to answer all my questions and set things up exactly as I wanted, but also recommended things to make it easier on my family down the line. Lee After attending one of Paul’s estate planning seminars, my husband and I knew we wanted Paul to assist us with our estate planning. His honest, professional approach to this necessary part of life put us at ease with the process. We will continue to recommend Paul and Cary Estate Planning. Jon We had a great experience working with Paul Yokabitus and the team at Cary Estate Planning to set up our Will and Estate Plan. The process was clear and easy, and in the age of COVID, our signing session was very well done, easy, and safe. Tamara The Cary Estate Planning team will make sure that you have the information you need to be confident in your estate planning decisions. I learned so much from videos, a one-on-one in-person consultation, the website, emails, and a newsletter mailed the old fashioned way. The fee is very reasonable given the importance of estate planning. No matter the size or number of your assets, don’t procrastinate like I did! Tony Paul is a masterful attorney. He’s very good at taking your intentions and defining that into a durable Trust and Will. Best of all he is as simple and plain-spoken as you like. Or as fast as intellectual as you may be. It’s all about your your speed and your desired outcomes. Would strongly recommend this firm. ## Trusted Estate Planning Attorney Offices in Cary and Raleigh Serving all of North Carolina Cary Office 1255 Crescent Green, STE 200, Cary, NC 27518 [Get Directions](https://www.google.com/maps?cid=10586265549256419209) Raleigh Office 9121 Anson Way Suite 235, Raleigh, NC 27615 [Get Directions](https://www.google.com/maps?cid=14359503740153328567) Capability to meet virtually to help all NC residents [919-659-8433](tel:919-659-8433) [Contact Us Now](https://caryestateplanning.com/contact-us/) DISCLAIMER: The law firm of Cary Estate Planning cannot and does not represent you until our client intake process is completed. Further, we reserve the right to accept or decline to represent any person or organization in any matter. Nothing on this website should be considered legal advice. Copyright © 2026 Cary Estate Planning. All Rights Reserved. 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(Select all that apply) I own a home or real estate I own a business I have investments, retirement accounts, or life insurance I have children under 18 I have a child or loved one with special needs I’m caring for aging parents (sandwich generation) I’m approaching or in retirement None of the above / just getting started ### Where are you located? Cary / Western Wake County Raleigh / Central Wake County Chapel Hill / Orange County Elsewhere in North Carolina Outside North Carolina --- Source: https://caryestateplanning.com/blog/medicaid-spend-down-planning-in-north-carolina/