Why Moving Assets Without Guidance Can Backfire in MassHealth Planning

Planning for long-term care is one of the most important and often most emotional steps you can take to protect your family and your savings. Many Massachusetts residents hope to qualify for MassHealth (the state’s Medicaid program) while preserving what they’ve worked hard to build. 

Unfortunately, moving assets without professional advice from an asset protection attorney can have the opposite effect, creating serious problems with eligibility.

Understanding MassHealth’s Look-Back Rules

Before making any financial moves, it’s important to understand how MassHealth reviews your assets and transfers. The program has strict guidelines to prevent applicants from giving away property simply to qualify for benefits.

The 5-Year Look-Back Period

MassHealth examines all transfers made within five years (60 months) before you apply for long-term care coverage. If you’ve transferred property or money for less than fair market value, the agency may impose a penalty period (a stretch of time during which you’re ineligible for benefits). 

For example, gifting $100,000 to a child within that window could result in several months of ineligibility, forcing you to pay privately for care.

Why Guidance Is Essential

Because every transfer is reviewed closely, even small or well-intentioned gifts can cause big problems. Some exceptions exist, such as transfers to:

• A spouse (these are generally exempt)
• A disabled child
• A trust for a disabled person under age 65
• Certain caretaker children who meet residency and care requirements

An experienced asset protection attorney can help determine which transfers are safe, which should be avoided, and when to act. Proper timing and documentation are everything.

Using Trusts Wisely: What Works in Massachusetts

A trust can be a valuable tool in MassHealth and estate planning, but not all trusts are created equal. Understanding how Massachusetts evaluates trusts is key to avoiding mistakes that make assets countable when you least expect them.

Irrevocable Trusts and the “Any Circumstances” Rule

Under MassHealth’s “any circumstances” test, if the trust language allows even the possibility that the principal could be distributed to or for your benefit, that principal is considered countable. In other words, a poorly drafted irrevocable trust can fail to protect your assets entirely.

That’s why professional drafting is critical. A properly structured irrevocable trust can:

• Protect your home and savings from nursing home costs
• Allow you to receive income from trust investments (without control over the principal)
• Provide long-term stability for your heirs

Every clause matters, from trustee powers to rights of substitution or occupancy. What seems like harmless flexibility can disqualify the trust under MassHealth’s rules.

The Role of the Family Home

For many families, the home is both emotionally and financially central. Massachusetts allows certain exemptions for the primary residence, especially if a spouse or dependent relative still lives there. However, if the home is placed in a trust that allows too much access or sale flexibility, MassHealth may count it as an available asset.

An attorney can design a trust that balances protection with flexibility, ensuring you can live in your home for life while preserving it for your children.

The Risks of DIY Asset Transfers

When families attempt to “protect” their assets without legal assistance, they often encounter unintended consequences. Common examples include:

• Gifting property during the look-back period, leading to months of ineligibility.
• Adding a child’s name to the deed can expose your home to their creditors or divorce settlements.
• Setting up the wrong type of trust, causing assets to remain countable.
• Ignoring tax implications, which can create capital gains issues for heirs later.

Each of these missteps can cause real financial harm. Once a disqualifying transfer occurs, reversing it may not remove the penalty. This is why it’s so important to seek help before taking action.

Key Takeaways

• MassHealth reviews five years of transfers. Uninformed gifts or property changes can result in significant delays in eligibility.
• Irrevocable trusts must be drafted carefully. Massachusetts applies the “any circumstances” rule when determining the countability of a claim.
• DIY planning can backfire. Online forms and informal transfers often fail to meet legal standards.
• Start early and get guidance. An experienced asset protection attorney helps you plan legally and strategically for the future.

When to Start Planning

The best time to begin protecting your assets is before a health crisis occurs, but it’s never too late to seek guidance. Even if long-term care is already needed, options may still exist to safeguard some of what you’ve worked for. At Kristine Romano Law, we help families make confident, informed choices about their homes, savings, and care. If you’re unsure whether your assets are protected from future costs, now is the time to act. Contact Kristine Romano Law today to take the next step. 



References: Mass.gov: Eligibility Operations Memo 20-04, Determination of Countability of Irrevocable Trusts and Justia (Oct 2024): Asset Protection Under the Law, and NerdWallet (Oct 18, 2023): Asset Protection: How It Works and Strategies, and The News Enterprise (Mar 4, 2023): Asset protection is major concern of aging population.