This blog post, written by estate planning and elder law attorney Nicole Wipp at the Family & Aging Law Center, PLLC is not legal advice. It is for informational purposes only. For guidance about protecting your assets from nursing home costs in Michigan, please contact our firm at (248) 278-1511.

True or False: You Can Give Money Away to Protect It from the Nursing Home

It’s one of the most common questions families ask:
“Can’t I just give my money to my kids so the nursing home doesn’t take it?”

At first glance, it sounds simple. But the truth is, giving away money or property without a plan can backfire when it comes to Medicaid eligibility and long-term care costs.

The Truth: It’s (Mostly) False

When someone applies for Medicaid to help pay for nursing home care, the government reviews your financial records from the past five years — known as the five-year lookback period.

If you’ve given away money or property during that time, those transfers are considered gifts, and Medicaid can impose a penalty period where you’re ineligible for coverage.

For example, if you gave your children $50,000 two years ago and your state’s average monthly nursing home cost is $10,000, you’d face a five-month penalty period before Medicaid will pay for care. During that time, you’re responsible for paying out of pocket.

So while it might seem like you’re protecting your money, those gifts can actually delay Medicaid approval and cost you more in the long run.

What If You Need Care Now?

Here’s the good news: it’s not too late to plan. Even if you or a loved one already needs nursing home care, an experienced elder law attorney can often help preserve a significant portion of your assets through crisis Medicaid planning.

1. Half-Loaf or Partial Gift Planning

This approach involves giving away part of your assets while retaining enough to privately pay during the Medicaid penalty period. Done correctly, it can preserve roughly half of the assets that might otherwise be spent down.

2. Spousal Asset Transfers

For married couples, Medicaid offers spousal protections. An attorney can help reallocate assets to the “community spouse” (the one still living at home), ensuring they remain financially secure while the other spouse qualifies for Medicaid coverage.

3. Medicaid-Compliant Annuities & Caregiver Agreements

Even if the five-year lookback can’t be avoided, attorneys can often use Medicaid-compliant annuities, caregiver contracts, or strategic spend-downs to speed up eligibility and preserve wealth.

Planning Ahead Is Still Best

The earlier you start, the more options you have. Tools like Medicaid Asset Protection Trusts (MAPTs) can safeguard assets completely once the five-year lookback period has passed. Early long-term care planning can save families thousands — and a lot of stress.

But even if time isn’t on your side, don’t give up. Skilled elder law attorneys can often protect far more than most people realize.

The Bottom Line

You can’t simply give money away to protect it from the nursing home — Medicaid’s rules are strict. But with the right legal guidance, you can still protect your assets, secure care, and preserve your legacy.

If you or a loved one are facing nursing home care, don’t wait. Contact our office today to schedule a consultation and learn how thoughtful Medicaid planning can protect what matters most.