Nursing homes are so expensive today that even those with a fair amount of assets can't afford to pay for the long-term care they need. People with assets in excess of the allowable Medicaid limits used to be able to set up various trusts to shelter their assets from Medicaid. But today, giving away assets to most trusts will result in Medicaid transfer penalties that will prevent the individual from qualifying for Medicaid for a period of time.
Congress has left limited options for dealing with excess assets and income to try to qualify for Medicaid long-term care coverage. Specifically, there are three types of special needs trusts that won't incur transfer penalities. These trusts are sometimes called Medicaid special needs trusts, medical assistance special needs trusts, supplemental needs trusts, special purposes trusts, or special treatment trusts.