(520) 355-1161
Last Updated: March 17, 2026
How Can I Protect My Family’s Future by Setting Aside Assets for Medicaid?
Setting aside assets for Medicaid involves using court-approved trusts to protect family resources while ensuring an applicant meets Arizona’s strict $2,000 resource limit.
Qualifying for the Arizona Long Term Care System (ALTCS) requires meeting precise financial limits. In 2026, a single applicant is generally restricted to just $2,000 in countable resources. Many families believe they must spend everything on nursing home costs before receiving help, but federal and state laws allow for specific legal protections.
Understanding the ALTCS Resource and Income Limits
To qualify for long-term care in Arizona, you must fall below both resource and income caps. If your assets or monthly income exceed these numbers, you will be denied coverage unless you use a specialized trust. For 2026, the primary limits for a single applicant include:
- Monthly Income Cap: $2,982 (gross income from all sources).
- Countable Resource Limit: $2,000 (cash, bank accounts, and non-exempt property).
- Home Equity Limit: $752,000 (if a spouse or disabled child resides there, or the applicant intends to return).
- Community Spouse Allowance: A healthy spouse may keep between $32,532 and $162,660 in resources.
Special Treatment Trusts for Asset Protection
Special Treatment Trusts allow an individual to hold resources that would otherwise cause a Medicaid denial. These irrevocable trusts ensure the state does not count the assets toward the $2,000 limit. Under A.R.S. § 36-2934.01, these trusts must follow strict Arizona-specific drafting requirements.
- First-Party Special Needs Trusts: These are funded with the applicant’s own assets (like an inheritance or settlement) and are for those under age 65.
- Pooled Trusts (d4C Trusts): These are managed by non-profit organizations and can often be used by individuals over age 65 to manage excess resources.
- State Reimbursement: These trusts must name AHCCCS as the primary beneficiary to receive remaining funds upon the applicant’s death to repay care costs.
Managing Excess Income with a Miller Trust
Arizona is an income cap state, meaning being even $1 over the $2,982 limit can result in disqualification. A Qualified Income Trust, or Miller Trust, is the legal solution for this problem. It funnels excess income into a trust account each month, making that income invisible for eligibility purposes.
- Direct Deposit Required: Income must be deposited into the trust account in the month it is received.
- Allowable Expenses: Funds can pay for a personal needs allowance ($149.10), medical premiums, and a spousal allowance.
- Professional Management: While a family member can be the trustee, the bookkeeping must meet strict AHCCCS audit standards.
Third-Party Special Needs Trusts for Family Planning
A third-party trust is created with assets belonging to someone else, such as a parent or grandparent. These are vital for setting aside assets for a loved one without ever triggering the state’s right to reimbursement. Because the applicant never owned the assets, the state cannot seek recovery from these funds after the beneficiary passes away.
Secure Your Eligibility with a Tucson Attorney
Applying for ALTCS is a complex process where a single mistake can lead to months of private-pay nursing home bills. Doug Newborn Law Firm, PLLC applies military-grade accuracy to ensure your trusts are compliant with 2026 Arizona standards. We help you protect what you have worked for while securing the care you need. Call 520-355-1161 to schedule a free consultation with our compassionate legal team today.
