You have invested much of your career-building wealth to secure your children’s and grandchildren’s futures. Estate planning offers peace of mind for financial security. However, needing nursing home or assisted living care can quickly deplete your savings, leaving you to choose between protecting your nest egg and affording the care you need.
Before exploring specific protection strategies, it’s important to understand that many applicants can plan to qualify for Medicaid without spending everything they have worked their lives to save. At Rice & Quattrone, PC, our New Jersey long-term care planning lawyers know how to utilize strategic planning to both protect your assets and meet your care needs. If you are considering long-term care options, feel free to reach out to our legal team.
Create a Medicaid Asset Protection Trust (MAPT)
Medicaid eligibility hinges on an individual not exceeding the income and asset thresholds. In New Jersey, an individual applying for Medicaid is not allowed to have more than $2,000 in countable assets ($3,000 if a married couple is both applying for Medicaid). To circumvent the asset requirement, you may be able to place your assets in a Medicaid Asset Protection Trust (MAPT). Funds in MAPT will not count against your Medicaid eligibility, making it a great resource for individuals who exceed the asset limit. Nonetheless, you must retitle assets at least five years before applying for Medicaid (or risk being denied services for a period of time).
Gift Assets
Strategic planning can protect your assets if you later require nursing home care. However, Medicaid requires that most gifts or transfers be made at least 5 years prior to applying for Medicaid. Most transfers or gifts made after this time will be counted against you when you apply for long-term care services.
Gifting assets or selling property at a price below fair market value, or within the five-year period, will trigger a Medicaid transfer penalty. As of April 1st, 2026, the daily penalty advisor is now $420.67. Medicaid calculates the penalty period by dividing the resource/asset gifted by the penalty divisor, then rounding down. The penalty clock starts when the individual applies for Medicaid, even if they would otherwise be eligible for benefits.
Transfer Assets to Your Spouse
If your spouse needs nursing home care, rest assured that New Jersey recognizes the importance of protecting the healthy spouse. The rules allow the community spouse to keep a portion of your assets and income, known as the community spouse resource allowance, ranging from $31,725 to $162,660. These protections are in place to give your family stability during this time.
However, the institutionalized spouse may have only $2,000 in countable assets. Of the countable combined assets, the community spouse is permitted to retain 50% of the total assets, subject to the minimum and maximum amounts above. Exempt assets include your primary residence, one vehicle, personal belongings, and certain funeral and burial accounts.
In addition to asset protection, a portion of the community spouse’s income will be protected. In New Jersey, the minimum monthly maintenance needs allowance (MMMNA) establishes a monthly allowance for the community spouse to live on. This adjusts yearly, with the new base to the community spouse allowance increasing to $2,705.00 as of July 1st, 2026. Unlike gifting to your children or other family members, the five-year lookback rule does not apply to spousal transfers.
Contact Our New Jersey Long-Term Care Planning Lawyers
Ready to protect your assets and plan for long-term care? Contact Rice & Quattrone, PC online or call (856) 673-0048 today.