How a Kansas Couple Protected Over $3 Million from Medicaid Spend-Down

The names in this story have been changed to protect our clients' privacy. The financial details are real.

Joseph had worked his way up for decades. By the time his wife Claire was diagnosed with dementia and needed memory care, the couple had built something most families only dream of: just over $3 million in assets. A paid-off home. Private mortgage loans he had made to other people over the years. Rental properties. A lifetime of careful decisions.

Then the bills started coming. Memory care in Kansas runs about $9,000 to $10,000 a month. Without a plan, Joseph was looking at writing that check every single month, indefinitely, until everything they had built was gone.

He called Advanced Legal Planning before it was too late.

What Joseph Was Up Against

When someone applies for Medicaid in Kansas, they have to disclose everything they own. Medicaid then separates those assets into two categories: exempt assets (which don't count against eligibility) and countable assets (which do).

Joseph's situation was actually stronger than most, but only because of how his assets were structured.

He owned several private mortgage loans, meaning he had personally lent money to other people and those people were paying him back with interest. He also owned rental real estate. Crucially, only his name was on these assets, not Claire's. Under Kansas Medicaid rules, income-producing property is exempt for Medicaid qualification. Because this income producing property was only in Joseph’s name and not in Clair’s, it is also safe from Medicaid Estate Recovery Services. (They can’t put a lien on it to recover their costs.)

That one detail protected approximately $2 million right off the top.

That left about $1 million in countable assets to work through.

How Kansas Medicaid Works for Married Couples

Here's where most families get blindsided. Kansas Medicaid doesn't just take everything, but the rules are complicated, and the math moves fast.

When one spouse needs nursing home or memory care (called the "Institutionalized Spouse"), Medicaid looks at the couple's combined countable assets and cuts that number in half. The healthy spouse at home (called the "Community Spouse") is allowed to keep half of the assets up to the cap of $162,660, which is the current Kansas maximum spousal protected amount. The Institutionalized Spouse must spend down her share to below $2,000 before Medicaid kicks in.

In Joseph and Claire's case:

• Total countable assets: ~$1,000,000

• Joseph's protected share: $162,660

• Claire's countable share that needed to be addressed: ~$840,000

Without a plan, that $840,000 would have to be spent on Claire's care before Medicaid would pay a dime.

The Strategy: A Medicaid-Compliant Annuity

This is where planning makes all the difference.

Most annuities are treated by Medicaid as countable assets, meaning they would sit in that $840,000 bucket. But there's a specific type of annuity, called a Medicaid-compliant annuity (MCA), that works differently. If the contract includes five specific provisions required by federal law, Medicaid treats the annuity as an income stream rather than an asset.

The moment Joseph purchased a MCA with Claire's $840,000 share, that money was no longer a countable asset on her balance sheet. She immediately qualified for Medicaid.

Over the following 48 months, the annuity paid that money back to Joseph in monthly installments. By the end of the payout period, the entire $840,000 had been returned to his side of the ledger. The family lost nothing except the payments made during the private pay period while the Medicaid application was processed (about four to five months at $9,000 per month) and the attorney fee.

What Would Have Happened Without a Plan

If Joseph had done nothing, or gone to an attorney who didn't specialize in this area, Claire would have needed to spend down her full $840,000 before Medicaid would pay anything. At $9,000 a month, that's roughly 93 months of private pay. Nearly eight years.

Instead, the family was in the private-pay window for about five months while the Medicaid application was processed. That's the benefit of doing it right.

What It Cost and Why It Was Worth It

Advanced Legal Planning’s fee for a case this complex: $15,000.

Total assets preserved for the family: over $3,000,000.

For Crisis Medicaid Planning, there are three fee levels at Advanced Legal Planning, depending on complexity:

• $9,000 for straightforward situations where you want peace of mind and professional oversight

• $12,000 for moderate complexity

• $15,000 for high complexity, like this case

The question isn't really whether $15,000 is a lot of money. The question is whether you'd pay $15,000 to keep $3 million in your family.

The Key Ingredient Most Families Don't Realize They Have

The single biggest factor that made this outcome possible? Joseph was still alive.

When a married couple is involved, the mechanics of Crisis Medicaid Planning change dramatically. The community spouse can receive assets, including annuity payments, without triggering penalties. That flexibility is what made it possible to protect essentially everything.

For individuals without a spouse, the options are different and more limited. That's a separate conversation, and one worth having before a crisis forces the issue.

What This Means If You're in a Similar Situation

If your spouse has been diagnosed with dementia, Alzheimer's, or another condition requiring assisted living or nursing home placement, the worst thing you can do is wait. The planning window doesn't stay open forever, and every month of unplanned private pay is money that might have been preserved for your family.

You don't need to have $3 million for this to matter. The same mechanics apply whether you're protecting $200,000 or $5 million.

If you want to learn more about how Kansas Medicaid works for married couples, the official Medicaid.gov resource is a good starting point. For a broader look at long-term care costs and planning options, LongTermCare.gov has reliable, up-to-date information.

Ready to find out what's possible for your family? Call Advanced Legal Planning at (316) 252-2233 or schedule a consultation online. Virtual meetings are available.