When it comes to preparing for long-term care, many people are surprised to discover just how state-specific Medicaid really is.
Yes—Medicaid is a federal program, but each state interprets and applies the rules differently. What that means for you? A strategy that protects assets in one state could backfire in another. For Colorado families, understanding our unique Medicaid landscape is essential when building a plan that truly works.
At Duncan Legal, PC, we help people solve life’s puzzles—including the complex and ever-changing puzzle of Medicaid planning.
Medicaid Planning Looks Different in Every State
Medicaid is funded jointly by the federal government and individual states. While the federal government provides the framework, each state has the flexibility to apply the rules in its own way, as long as the result isn’t more restrictive than the federal guidelines.
That’s why your cousin in New Mexico or your friend in Kansas may be playing by a completely different set of Medicaid rules than we do here in Colorado.
Here are just a few key areas where the rules differ:
- Retirement Accounts: Some states count IRAs or 401(k)s as available resources, while others exempt them.
- Planning Tools: Certain states allow tools like promissory notes or Medicaid-compliant annuities—others do not.
- Spousal Protections: The amount a healthy spouse can retain while the other spouse applies for Medicaid varies significantly.
The Role of MAPTs in Medicaid Planning
A Medicaid Asset Protection Trust (MAPT) is a widely used tool to safeguard a home or savings from long-term care costs—but even a well-drafted trust can fail if it doesn’t align with Colorado-specific rules.
Here’s how:
- Trustee Restrictions: Some states, including Colorado, have strict requirements about who can serve as trustee—especially when the person creating the trust (the grantor) still has some influence or authority.
- Income vs. Principal Rights: How income from a trust is handled can differ by state. In one state it may be protected, while in another, it could affect Medicaid eligibility.
- Homestead Exemptions: Whether you can continue to live in your home once it’s placed in a trust—and still have it considered an exempt asset—depends entirely on state-specific homestead laws.
Why This Matters Now More Than Ever
Congress is currently debating potential cuts to federal Medicaid funding. If those cuts are passed, states like Colorado may face increased financial pressure—possibly leading to stricter eligibility requirements or reduced benefits.
At the same time, the cost of long-term care continues to rise, and more families than ever are relying on Medicaid to cover care at home or in a skilled nursing facility.
Planning now, with the right guidance, ensures your family is protected from the unknowns ahead.
Medicaid Planning in Colorado Requires a Local Expert
The truth is, there is no such thing as a universal Medicaid plan. What works in one state may not work here—and in fact, it may even do harm. The only way to be confident in your long-term care strategy is to work with an attorney who understands Colorado’s unique Medicaid rules inside and out.
Let’s Make Sure Your Plan Is Ready—When It Matters Most.
At Duncan Legal, PC, we help Colorado families prepare for life’s most important moments—by crafting personalized, legally sound plans that provide peace of mind today and security for tomorrow.
Visit Us: 6436 S Racine Cir, Ste 227, Centennial, CO 80111
Call Us: (303) 394-2358
Learn More: www.duncanlegal.com
Duncan Legal, PC
Helping people solve life’s puzzles.
