What You Need To Know About Medicaid Planning In Tennessee

Many people are surprised to learn that between 70% and 80% of seniors will need long-term

care at some point in their lives. In Tennessee, the cost of nursing home care can exceed $100,000 annually, creating significant financial stress for families. Fortunately, Medicaid in Tennessee offers a pathway to alleviate some of that burden, but only if you're prepared. Planning ahead can protect your assets and help ensure you or your loved one receives the care that’s needed without financial devastation.

Medicaid planning is the legal process of organizing your assets and income to qualify for Medicaid while maintaining as much of your financial security as possible. In Tennessee, Medicaid is provided through TennCare and can help cover the high costs of long-term care. However, the rules are not simple. Many families assume they must spend down everything to qualify, but proper planning can often preserve a significant portion of a person’s or couple’s estate. Understanding how Medicaid in Tennessee works is the first step in making informed choices.

Understanding Eligibility for Medicaid in Tennessee

To qualify for Medicaid in Tennessee, applicants must meet specific income and asset limitations. For example, in 2025, a single individual applying for Medicaid must have less than $2,000 in countable assets. Contrary to popular belief, you don’t have to spend everything to meet this threshold. Some assets, such as a primary residence up to a certain value, one vehicle, and prepaid funeral arrangements, are exempt. The situation becomes even more nuanced when the applicant is married, as there are additional planning opportunities to protect the spouse who is not applying for benefits. Consulting with a Medicaid planning attorney is the best way to structure your finances while staying within the rules.

The Five-Year Look-Back Period

A component of Medicaid planning involves understanding the five-year look-back period. Medicaid in Tennessee will review any transfers of assets made within five years prior to applying for benefits. If any assets were transferred for less than their fair market value, the applicant may face a penalty period during which they are ineligible for benefits. This is why early and proactive planning is strongly recommended. Waiting until a health crisis forces a decision can significantly reduce the options available to you or your loved one. By working with a qualified elder law attorney, you can develop a plan that legally protects your assets and avoids unintended consequences.

Asset Protection Strategies That Work

There are several strategies that can help preserve wealth while qualifying for Medicaid. These include tools like irrevocable trusts, Medicaid-compliant annuities, and structured asset transfers between spouses. Every person’s circumstances are different, and these tools must be used correctly to be effective. A common concern is whether Medicaid will claim your home after death to recover costs. While Medicaid in Tennessee may seek reimbursement through estate recovery, appropriate planning can often prevent your home from being lost. With the right legal guidance, you can maintain control over your property and preserve it for your heirs.

Real-Life Planning Makes a Difference

Consider the real-life story of Mary, a widow with over $200,000 in assets who expected to need nursing home care. She initially believed she would need to spend nearly everything before qualifying for Medicaid. Through the strategic use of a Medicaid Asset Protection Trust, Mary was able to keep a large portion of her savings and still meet the eligibility requirements. This approach ensured she could afford the care she needed without sacrificing her entire estate. For Mary and her family, Medicaid planning offered peace of mind and financial security.

How Johnson McGinnis Elder Care Law & Estate Planning Can Help

Preparing for long-term care can feel overwhelming, but you don’t have to face it alone. Johnson McGinnis Elder Care Law & Estate Planning, serving the Nashville and surrounding areas, specializes in helping individuals and families understand the complexities of Medicaid in Tennessee. Whether you’re just beginning to think about the future or facing an immediate need, our team can provide personalized guidance and legal strategies tailored to your situation. Contact us to learn how we can help you preserve your assets and access the care you deserve.