If you’re thinking about long-term care—and how to afford it—you’ve probably heard the phrase “Medicaid spend-down.” And if that term makes you nervous, it should. Without a strategy, a Medicaid spend-down can jeopardize the wealth you’ve worked hard to build.
But there’s good news: with the right legal strategy, you can avoid losing everything. At Cary Estate Planning, we help North Carolina families protect what they’ve worked hard for—and position themselves to qualify for Medicaid without draining their assets.
Here’s what you need to know about protecting your assets from a Medicaid spend-down in 2025 and beyond.
Medicaid is the largest payer of skilled nursing care in the U.S., but it’s also a means-tested program. That means you can’t qualify unless your income and assets fall below strict thresholds.
In North Carolina and most states, that means:
A Medicaid spend-down is a process where individuals whose income or assets exceed Medicaid’s eligibility limits must use their own funds to pay for medical and long-term care expenses until they qualify for Medicaid assistance. This may involve using savings, retirement funds, or other non-exempt assets to cover healthcare costs. In some cases, people may need to use proceeds from selling certain assets, but a primary residence is usually exempt while the owner lives in it.
That’s the default path. But there’s a smarter, more strategic way forward.
As of 2025, there’s a growing sense of uncertainty around Medicaid. Proposed legislation in Washington threatens to cut federal funding, which could:
In other words: relying on Medicaid in the future could be harder—and more expensive.
But here’s the thing: the core principles of Medicaid planning haven’t changed. And that means proactive legal planning is more important than ever.
The goal of Medicaid asset protection planning is simple:
To legally reclassify or reposition your assets so that they aren’t counted against you when you apply for Medicaid.
And the earlier you start, the more options you have.
The key tool in our long-term planning approach is the irrevocable asset protection trust. Here’s how it works:
After five years—the Medicaid look-back period—those assets are fully protected. They can’t be taken or counted if you apply for Medicaid.
Medicaid reviews all asset transfers made in the five years before your application. Any gifts or transfers made during this period can trigger penalties or delays in coverage.
That’s why timing matters.
If you wait until you’re already facing a health crisis, your options are limited. But if you plan ahead, you can shield your home, your savings, and your dignity.
Think of it as making yourself legally poor—on paper—without giving up control.
Sometimes people come to us when the crisis has already hit. A loved one is in the hospital or nursing home, and Medicaid is the only way to pay for long-term care.
In those cases, we use what’s known as a Medicaid spend-down strategy, where we:
It’s not ideal, but it can still make a major difference. And even at the last minute, legal strategy can save tens of thousands of dollars.
When it comes to Medicaid, not all assets are treated the same.
Countable assets include:
Exempt assets may include:
Important: Assets in an irrevocable trust (established more than five years prior) are not counted.
Possibly—but not the fundamentals.
Congress may adjust Medicaid funding, change reimbursement rates, or tweak eligibility rules. But the need for asset protection and long-term planning is evergreen.
If anything, coming changes make early planning even more essential.
Waiting to “see what happens” in D.C. means playing financial roulette with your future. Our approach has always been about:
Many people assume their will or revocable trust is enough. But for Medicaid planning, that’s not true.
Wills are only useful after death. Revocable living trusts do not protect assets from Medicaid, because you still have full control.
That’s why we use irrevocable protection trusts—they remove the assets from your personal ownership, making them invisible to Medicaid.
We don’t just prepare paperwork—we build long-term strategies that work.
When you partner with Cary Estate Planning, we:
Whether you’re 55 or 75, the best time to start is today.
You spent your life building something worth protecting. Don’t let a health crisis or policy shift in Washington take it all away.
At Cary Estate Planning, we help North Carolina families preserve their wealth, qualify for care, and protect their legacy.
Schedule a consultation today to find out how we can help you avoid a Medicaid spend-down—and keep more of what’s yours.
Serving families in Cary, Raleigh, and across North Carolina with forward-thinking, compassionate estate and Medicaid planning.
Paul Yokabitus is the CEO and Managing Partner of Cary Estate Planning, a Cary, NC, estate planning law firm. With years of experience in estate and elder law, he has zealously represented clients in various legal matters, including estate planning, guardianship, Medicaid planning, estate administration, and other cases.
Paul received his Juris Doctor from the Campbell University School of Law and is a North Carolina Bar Association member. He has received numerous accolades for his work, including being named among the “Best Attorney in Cary” in 2016 and 2017 by Cary News and Rising Star in 2020-2023 by Super Lawyers.