State Rules Matter: Why Medicaid Planning Is Not One-Size-Fits-All

If you're planning for long-term care, you may assume that Medicaid rules are the same across the country. After all, Medicaid is a federal program—right?

Not exactly. And that misunderstanding can lead to costly mistakes.

At The Lansky Law Firm, we believe in providing families across Tennessee with peace of mind through clear, thoughtful legal planning. One of the most important truths we help clients understand is this: Medicaid planning is not one-size-fits-all. What works in another state may not work—or may even backfire—here in Tennessee.

Medicaid: Federal Program, State-Specific Rules

While Medicaid is funded in part by the federal government, each state administers its own program and has the authority to interpret and implement rules within federal guidelines.

This flexibility means that:

• What counts as a protected asset in one state may be considered countable income in another.

• Your neighbor across state lines might be able to use financial tools that Tennessee restricts or disallows.

This matters even more when you’re using a Medicaid Asset Protection Trust (MAPT) to shield your assets from the high costs of long-term care.

What Makes Medicaid Planning So Complex?

Here are just a few of the ways state-specific differences impact Medicaid eligibility:

• Retirement Accounts: Some states count IRAs and 401(k)s as available resources; others treat them as exempt.

• Financial Tools: Promissory notes and Medicaid-compliant annuities may be allowed in one state but restricted in another.

• Spousal Protections: Every state sets its own limits on how much income or assets a healthy spouse can keep.

The Risks of a Poorly Tailored Trust

A MAPT drafted without careful consideration of Tennessee law can cause more harm than good. Here’s where issues often arise:

• Trustee Rules: If the trust’s creator retains too much control, it may disqualify the trust under Tennessee rules.

• Income Rights: Some income streams within a trust may count against Medicaid eligibility, depending on state treatment.

• Your Home: Homestead exemption laws differ. In Tennessee, your right to live in a home that’s been placed in a trust might affect whether it’s still considered a protected asset.

Why This Matters More Than Ever

With rising long-term care costs and the potential for federal Medicaid cuts on the horizon, many states—including Tennessee—may be forced to tighten eligibility requirements.

The truth is, more families than ever will rely on Medicaid to cover in-home or nursing facility care in the years ahead. Planning early—and planning smart—can help ensure you and your family aren’t left vulnerable when the time comes.

One Size Doesn’t Fit All—Especially in Tennessee

Using a plan designed in another state or based on outdated information can put your assets and care options at risk. That’s why it's so important to work with an estate planning attorney who knows Tennessee’s specific rules inside and out.

Let’s Make Sure Your Plan Is Ready—When It Matters Most.

At The Lansky Law Firm, we’re here to help you protect your hard-earned assets with strategies that work where you live. Whether you’re exploring a Medicaid Asset Protection Trust or just starting to consider long-term care planning, our team is here with the guidance and preparation you deserve.

Visit Us: 6800 Poplar Ave #225, Memphis, TN 38138 Call Us: (901) 767-7006 Learn More: www.lanskylawfirm.com

The Lansky Law Firm Peace of Mind through Preparation.