Crisis Medicaid Planning in Louisiana

Crisis Medicaid Planning is essentially emergency estate and asset protection work for individuals who are already in, or about to enter, a nursing home (or need long-term care at home) and who either have not done advance Medicaid planning or whose existing plan does not protect their assets from being rapidly depleted by care costs.

As of the date of this post, there are currently three (3) individuals in the State of Louisiana who are Certified Medicaid Planners by the CMP Governing Board (an independent, autonomous subsidiary of the Wealth Preservation Institute (WPI). Newest among the ranks is Theus Law Offices’ own Vonda Richardson! Certified Medicaid Planners are highly vetted and must pass a rigorous examination to attain certification, and must be recertified periodically.

Here’s a forward-looking, detailed breakdown of Crisis Medicaid Planning, when it’s used, and how it works in practice—especially for Louisiana:

1. Definition

Crisis Medicaid Planning is the process of structuring assets, income, and care arrangements in compliance with Medicaid’s rules after a care need has already arisen, so that the individual can:

Qualify for Medicaid coverage as quickly as possible, and
Protect as much of their life savings as the law allows.

2. When It’s Needed

A Medicaid crisis exists when:

The person is already in a nursing home or about to be admitted.
Monthly care costs are unsustainable (e.g., $6,000–$8,000+ per month in Louisiana).
The individual has too much in countable assets to qualify for Medicaid, but not enough to pay privately for long.
Family realizes they may lose most or all of the estate if they “just spend down.”

3. Key Goals

Accelerate Medicaid eligibility without exhausting assets.
Preserve exempt property (home, vehicle, personal items, some prepaid expenses).
Convert countable assets into exempt or income-producing assets for the spouse.
Plan for estate recovery (protecting assets from Medicaid lien after death).
Maintain dignity and choice in care setting.

4. Core Strategies

(Exact options depend on state rules—Louisiana has unique provisions.)

Spend-down on exempt items: Pay for home repairs, vehicle replacement, medical equipment, pre-paid funeral.
Medicaid-compliant annuities: Convert excess assets to income for the community spouse.
Asset transfers: Certain transfers to spouses, disabled children, or caregiver children may be exempt from penalties.
Caregiver agreements: Pay family for care in a compliant way.
Promissory notes / loan arrangements: Structure repayment terms to meet Medicaid rules.
Home protection tools: Transfers, usufruct reservations, Lady Bird deeds (not currently available in Louisiana), or Medicaid Asset Protection Trusts (MAPTs) if there’s still a limited runway before application.
Lien mitigation / estate recovery planning: Address the claim Medicaid may have against the home.

5. Louisiana-Specific Considerations

Community Spouse Resource Allowance (CSRA): The healthy spouse can keep up to a certain limit in countable assets.
Income Cap: If income exceeds the cap, a Qualified Income Trust (“Miller Trust”) may be needed.
Usufruct and forced heirship laws intersect with Medicaid planning.
Transfer penalty: Five-year lookback still applies, but some transfers are exempt.

6. Risks & Pitfalls

DIY attempts often cause longer periods of ineligibility due to improper transfers.
Failing to document spend-downs can delay eligibility.
Using non-compliant annuities or gifts can trigger penalties.
Not addressing estate recovery can undo the asset protection after death.

7. Forward-Thinking Approach

While crisis planning is reactive, it’s most powerful when combined with:

Proactive planning tools like irrevocable trusts done before the 5-year lookback.
Coordinated estate planning so that wills, powers of attorney, and trusts align with Medicaid strategies.
Technology integration—apps like GeauxDocs (a proprietary app exclusively available to clients of Theus Law Offices) could store Medicaid documents, renewal reminders, and asset logs.

8. What You Need to Know About Medicaid Planning (An Easy-To-Use Family Guide)

For more information about Medicaid Planning, CLICK HERE to download a complimentary guide.

Theus Law Offices