Medicaid planning is the process of arranging a person’s finances, legally and in advance, so that Apple Health can help pay for nursing home or in-home long-term care without leaving a spouse impoverished or wiping out everything a family has built. Holmes Law works with clients as a Washington Medicaid planning attorney, explaining how the state counts income and assets, how the five-year look-back works, what a spouse at home may keep, and what the state can recover after death.
Washington’s rules are not a copy of any other state’s. Washington recovers Medicaid costs from nonprobate assets, including property that passes by transfer on death deed, joint tenancy, or a living trust; it has its own list of long-term care programs administered by the Department of Social and Health Services (DSHS); and, as a community property state, it treats married couples’ assets in ways that surprise families who have moved here from elsewhere. Michael Holmes is admitted in Washington and works with clients statewide by video and phone. What follows is general information to help you prepare for a consultation, not advice about your specific case.
Who Runs Medicaid Long-Term Care in Washington
Washington’s Medicaid program is called Washington Apple Health. The Health Care Authority (HCA) is the single state Medicaid agency and writes most of the financial eligibility rules, found in Title 182 of the Washington Administrative Code (WAC). Long-term care financial eligibility is primarily in chapter 182-513 WAC for institutional care and chapter 182-515 WAC for home and community-based services. DSHS, through the Aging and Long-Term Support Administration (ALTSA) and its Home and Community Services (HCS) field offices, processes long-term care applications, determines financial eligibility, and performs the CARE functional assessment that decides what services a person needs.
The major programs a Washington Medicaid planning attorney evaluates include nursing facility Apple Health, Community First Choice (CFC), the COPES waiver, Medicaid Personal Care, and the Medicaid transformation project programs, Medicaid Alternative Care (MAC) and Tailored Supports for Older Adults (TSOA). The WA long-term care page describes what each program pays for.
The Two Eligibility Tests: Function and Finances
Every applicant must meet a functional test, meaning the CARE assessment must show the person needs the level of care the program provides, and a financial test. The financial test has two parts:
- Resources. Countable resources (bank accounts, investments, non-exempt real estate, cash value life insurance above certain limits) must be at or below the resource standard. The standard for a single applicant is very small. The exact figure, like the other dollar standards, is published by HCA and should be checked against the current program standards when an application is prepared.
- Income. Washington compares the applicant’s gross income to a special income level for categorically needy long-term care. Income under that level supports eligibility for the broadest set of programs. People with higher income are not automatically barred: Washington’s rules provide medically needy pathways for some settings, in which income above the standard is offset against the cost of care.
Washington does not rely on the income (Miller) trust model that “income cap” states use to bring over-limit applicants into eligibility. Whether a higher-income applicant can receive services at home, in an adult family home, in assisted living, or only in a nursing facility depends on the program and the setting, and that analysis is one of the first things to work through.
Exempt Assets Under Washington Rules
Not everything a person owns counts. Common exempt or excluded resources include:
- The home, while the applicant, a spouse, or a dependent relative lives there, or while the applicant intends to return, subject to a home equity limit that is adjusted each year. Federal legislation enacted in 2025 (H.R. 1) sets a $1,000,000 cap on the home equity limit beginning January 1, 2028, which will affect how states set the limit going forward.
- One vehicle, within the rules in the WAC.
- Household goods and personal effects.
- Certain burial funds and burial spaces, and irrevocable prepaid funeral arrangements.
- Retirement accounts in some circumstances, depending on whether they are in payout status and whose account it is.
- Resources set aside under an approved plan, or protected by a qualifying Long-Term Care Partnership policy under chapter 48.85 RCW.
How an asset is titled, whether it can be sold, and whether it produces income all affect its treatment. A careful inventory is the foundation of any plan.
The Five-Year Look-Back and Transfer Penalties
Under WAC 182-513-1363, the agency reviews transfers made within the sixty months before the month the applicant attains institutional status or applies for long-term care, whichever is later. A transfer for less than fair market value, such as a gift to a child, a sale to a relative at a discount, or adding a child to a deed, can trigger a period of ineligibility.
The penalty is calculated by dividing the uncompensated value by the statewide average daily private cost of nursing facility care in effect at the time of application or the date of transfer, whichever is later. The result, rounded down to whole days, is the number of days of ineligibility. For an applicant, the penalty does not begin until the applicant has applied and would otherwise be eligible, which is why “gifting and hoping” often backfires: the penalty clock may start only when the family can least afford it.
Transfers that are not penalized
Federal law and Washington’s rules in chapter 182-513 WAC recognize exceptions, including transfers:
- To a spouse, or to another person for the sole benefit of the spouse.
- To a child who is blind or permanently disabled, or to a trust for such a child’s sole benefit.
- Of the home to a child who lived in it and provided care for a qualifying period that kept the parent out of a facility.
- Of the home to a sibling with an equity interest who lived there for a qualifying period.
- To a trust for the sole benefit of a disabled person under age 65.
- Where the applicant shows the transfer was made exclusively for a purpose other than qualifying for Medicaid, or where the asset is returned.
Each exception has documentation requirements. A WA special needs trust may be the right vehicle for a transfer to a disabled child.
Spousal Impoverishment Protections
When one spouse needs long-term care and the other remains at home, federal spousal impoverishment rules and Washington’s implementing regulations protect the community spouse. In Washington, the resources of both spouses are generally counted together regardless of whether they are community or separate property under chapter 26.16 RCW. The community spouse may then keep a community spouse resource allowance set by the state within federal limits, and the institutionalized spouse keeps the resource standard. The rest must be spent down or converted before eligibility.
On the income side, the community spouse keeps his or her own income, and if that income is below a minimum monthly maintenance needs allowance, part of the institutionalized spouse’s income can be allocated to the community spouse. A shelter-cost adjustment may apply. If circumstances are exceptional, a fair hearing or court order can raise the allowances.
Planning for couples often involves spending down on things the couple needs anyway (home repairs, a replacement vehicle, prepaying funeral expenses), converting countable assets into exempt ones, or using a Medicaid-compliant annuity to turn excess resources into income for the community spouse. Each of these tools has specific rules, and the timing relative to the “snapshot” date when the state measures the couple’s resources matters.
Estate Recovery in Washington: Why Probate Avoidance Is Not Enough
Estate recovery is the part of Washington’s Medicaid system most likely to catch families off guard. Under RCW 43.20B.080, for a recipient who was 55 or older when services were provided, the state may recover certain costs from the recipient’s estate and from nonprobate assets as defined in RCW 11.02.005. That can include property passing by joint tenancy with right of survivorship, a transfer on death deed under chapter 64.80 RCW, a payable-on-death account, a community property agreement, or a revocable living trust.
Recoverable services depend on the dates of service. Under WAC 182-527-2742, for services on or after January 1, 2014, recovery for recipients 55 and older generally focuses on long-term services, such as nursing facility care, home and community-based waiver and personal care services, hospice, and related hospital and prescription drug costs, rather than ordinary Apple Health medical coverage. Services under the Medicaid transformation project (MAC and TSOA) are exempt from recovery.
Recovery is deferred while a surviving spouse is alive, or while there is a surviving child who is under 21 or who is blind or disabled. The state also has undue hardship rules, and state law requires that a surviving registered domestic partner be treated as a spouse would be. These rules do not erase the claim; they postpone or limit it, so a plan that assumes a revocable trust or TOD deed will protect the home from recovery is built on the wrong assumption.
Planning Tools a Washington Medicaid Planning Attorney May Use
The right plan depends on health, timing, family, and assets. Tools include:
- Durable powers of attorney with express gifting and trust authority, so an agent can carry out a plan if the principal loses capacity.
- Irrevocable trusts funded more than five years before care is needed, sometimes called Medicaid asset protection trusts. See WA irrevocable trusts.
- Caregiver agreements that pay a family member fair value for care under a written contract, which can reduce assets without a penalty when properly structured.
- Medicaid-compliant annuities for a community spouse.
- Exempt transfers, including the caregiver child home transfer.
- Updating wills and trusts so a spouse receiving Apple Health is not disqualified by an inheritance, often by using a testamentary supplemental needs trust. See Washington wills.
- “Half-a-loaf” strategies, in which part of the assets is transferred and the rest pays privately through the penalty period, analyzed carefully against the current divisor.
Some tools are appropriate years ahead; others work only in a crisis. Holmes Law explains the trade-offs, including loss of control and tax consequences, before recommending anything.
The Application Process
A long-term care application in Washington is typically filed through Washington Connection or with the local HCS office, and DSHS will request verification of income, resources, and transfers during the look-back. Expect requests for statements, deeds, and explanations of large withdrawals. Deadlines to respond are short, and missing one can lead to denial. If the agency denies eligibility or imposes a penalty, the applicant has the right to an administrative hearing, with strict deadlines for requesting it.
Common Mistakes a Washington Medicaid Planning Attorney Sees
Many denials and penalties in Washington trace back to a handful of avoidable errors:
- Adding a child to the deed of the home. This is usually a transfer of part of the home’s value, can trigger a penalty, and exposes the home to the child’s creditors and divorce. It also fails to avoid estate recovery, because Washington reaches the recipient’s share of joint property.
- Unexplained cash withdrawals. DSHS will ask where large withdrawals went during the look-back. Without receipts, the agency may treat the money as a gift.
- Paying family caregivers informally. Payments without a prior written agreement are often treated as gifts, even when the care was real.
- Relying on an old power of attorney. Documents signed before 2017, or documents without express gifting and trust authority, may not let an agent carry out a plan.
- Assuming a revocable trust shields assets. Assets in a revocable trust are countable for eligibility and are subject to estate recovery.
- Leaving an inheritance outright to a spouse on Apple Health. An inheritance can push the surviving spouse over the resource standard and interrupt coverage.
Each of these can usually be avoided with a review before money moves.
Why timing matters
Medicaid planning is not a single event. Planning five or more years ahead offers the widest range of tools, including irrevocable trusts that will be outside the look-back by the time care is needed. Planning in the months before an application focuses on spousal protections, exempt purchases, and exempt transfers. Planning after an application has been filed focuses on responding to verification requests and, when needed, requesting a hearing. A Washington Medicaid planning attorney can tell you which stage you are in and what can still be done.
Frequently Asked Questions
How far back does Washington look at gifts?
Sixty months. The agency reviews transfers made in the five years before the month the applicant attains institutional status or applies, whichever is later, under WAC 182-513-1363.
Will putting my house in a living trust protect it from Washington estate recovery?
No. Washington’s estate recovery statute reaches nonprobate assets, which include property in a revocable living trust and property passing by transfer on death deed. Other planning may protect the home, but a revocable trust by itself does not.
Does Washington count my spouse’s separate property?
Generally yes. For long-term care eligibility the state counts the resources of both spouses together, whether community or separate, and then applies the spousal protections.
Do I need a Miller trust in Washington?
Washington is not a Miller trust state. Higher-income applicants are evaluated under Washington’s categorically needy and medically needy rules, and what services are available depends on the program and care setting.
Can I pay my daughter for taking care of me?
Yes, if it is done correctly. Payments under a written caregiver agreement for fair value, made going forward, can be treated as compensated. Informal payments or payments for past care are frequently treated as gifts.
Is it too late to plan if Mom is already in a nursing home?
Usually not. Crisis planning can still protect resources for a spouse, identify exempt transfers, and structure the application to avoid unnecessary penalties.
Speak With a Washington Medicaid Planning Attorney
Medicaid rules change and the stakes are high. Holmes Law can review your situation, explain the Washington rules that apply, and help you build a plan. Visit the Washington elder law hub for related topics, or contact Holmes Law to speak with Michael Holmes.