Once you’ve disclosed all your resources to Medicaid, it’s up to the state to determine which ones are countable and which are non-countable. The term “non-countable resource” is defined quite narrowly. It only includes a very small list of specific assets that the federal government has said should be disregarded by the Department of Human Services.

The following list covers the most common non-countable resources:

  1. Term life insurance
  2. Irrevocable prepaid funeral plans
  3. A single automobile

That’s a pretty short list! Fortunately, there are other assets that can be considered non-countable. The trouble is, there are strings attached. For example, your primary residence is exempt if you are married and your spouse continues to live there OR if you are single and have signed a sworn statement that you intend to return home before you die.

You might notice that non-countable resources have nothing to do with whether an asset is tax qualified. That’s because tax law and Medicaid law have nothing to do with each other.

Just because you have to pay income tax to withdraw from an IRA doesn’t mean that IRA is non-countable. And even though your farmland generates income that you can use to help pay your nursing home bill, that farmland is still a countable resource.

Medicaid doesn’t even use the same definition of “income” as the IRS does!

And if that wasn’t complicated enough, a non-countable asset can quickly become a countable asset. What happens if your spouse dies? Can you really have the intent to return home after two years in a nursing home? If you rent out your house to keep the bills paid, how are you going to return to it?

Obviously, planning for Medicaid eligibility won’t be as simple as signing an intent to return home and prepaying your funeral. But we can help navigate the countable resource conundrum. Call our office at (712) 737-3885 to get started with our long-term care planning experts!