New Mexico Medicaid Planning Lawyer

Quick Summary: New Mexico Medicaid Planning Lawyer

• To qualify for Medicaid long-term care coverage, you must have very-limited income and assets.
• Those who are over the income and asset limits can explore strategies to still be able to qualify, such as spending down resources or creating a Miller trust for income.
• Medicaid program providers use estate recovery to recoup program costs after the covered person passes, which can result in liens on property and accounts.
• A Medicaid asset protection trust can be used to possibly preserve assets, but these must be created before the program’s “look-back” period of five years.

Need immediate help? Contact New Mexico Financial & Estate Planning Attorneys.

Medicaid can cover the costs of medical care for individuals with limited financial means. One particularly beneficial group of programs can pay for the costs of long-term services and supports (LTSS) for individuals who have disabilities that make them unable to keep up with their activities of daily living (ADLs).

However, there’s a catch: unlike other forms of Medicaid, LTSS programs engage in what’s called “estate recovery.” This means that providers of Medicaid LTSS services in New Mexico are able to recover the costs of covered care after the death of the beneficiary through their estate. While there are many exempt categories of assets, there is still the risk that someone’s hard-earned legacy could be decimated by estate recovery after they pass.

Fortunately, there are multiple options available to mitigate estate recovery. The most effective methods involve careful planning, which must take place years in advance of the need for Medicaid coverage. Other methods are also available for families who suddenly find themselves in a position where a loved one urgently requires Medicaid care.

New Mexico Financial & Estate Planning Attorneys can discuss your options for either scenario. Whether you need Medicaid now or are planning years ahead, we can provide you with an experienced attorney to navigate your options and potentially create a Medicaid trust.

Get assistance, and find out about the first steps you can take during a confidential, no-obligation case review. Schedule your consultation with a knowledgeable long-term care planning lawyer or elder law attorney in New Mexico when you call our firm at (505) 503-1637 or contact us online.

When Should I Talk to a New Mexico Medicaid Planning Attorney?

There’s never a bad time to discuss long-term care planning with a lawyer in New Mexico, but it makes the most sense when you have assets you want to protect. Medicaid planning can, therefore, take place at any age, not just when you are worried about a current or possible medical condition.

Unfortunately, many families end up in a position where a loved one needs Medicaid LTSS coverage much sooner than anticipated. While this scenario can mean making tougher choices, it’s also much more vital to discuss your options with an experienced lawyer as soon as you can.

Here are a few signs that you may want to speak with an attorney about nursing home Medicaid planning in New Mexico in the near future:

• You have children or others in your life who depend on you for support, and you want to prepare for a possible need to use Medicaid LTSS programs while minimizing the effects on your ability to support them.
• You worked hard to build a legacy you want to leave to others, and Medicaid asset protection makes sense to manage possible risks.
• You are reaching retirement age and want to ensure long-term financial stability across a broad range of possible scenarios.
• You are worried about asset protection in general, including a scenario where you may need Medicaid LTSS to pay for necessary care.
• You have received a worrying diagnosis, or you are generally concerned about the trajectory of your health over the next few years.
• You know you need nursing home-level care now or in the immediate future, but you’re worried you may not qualify or that you’ll lose assets in exchange for coverage.
• A loved one increasingly needs medical support to function and perform daily activities, indicating an impending need for nursing home-level care.
• A loved one is no longer able to support themselves independently, and they need a higher level of care than they can afford.
• A loved one is in the midst of a health crisis, and they urgently need to qualify for Medicaid to obtain medical support for their long-term survival.

As you can see, these scenarios range from managing risk over the long term to responding to an urgent need. With Medicaid planning, earlier is always better, but it’s never too late to start. 

If you are facing an urgent situation, you can always speak to a Medicaid crisis planning attorney in New Mexico. They can provide advice on your next steps and what you can do now to help you or a loved one qualify.

How Do I Know If I’m Eligible for Medicaid in New Mexico?

Medicaid LTSS program eligibility is determined by three main criteria:

1. The applicant’s level of medical care needed
2. The applicant’s total available resources (AKA their savings, property, and other assets)
3. The applicant’s monthly household income

1. Nursing Home Level of Care

Nursing home level of care (NHLOC), also called nursing facility level of care (NFLOC), refers to a set of medical criteria that evaluates the applicant’s ability to perform basic functions. These functions are referred to as activities of daily living (ADLs). 

To evaluate if you need a skilled nursing facility and are appropriate for Medicaid LTSS, a screener will ask about your ability to perform ADLs, including:

• Bathing and maintaining general hygiene
• Getting dressed
• Chewing and swallowing food
• Getting out of bed unassisted
• Walking, unassisted or with a device like a cane or walker
• Going to the bathroom
• Setting up and taking medications
• Recognizing an emergency and being able to respond to it

If you score low enough on an assessment by not being able to perform multiple categories of the above ADLs, you may be considered eligible for NHLOC.

2. Resource Limits

Resources are the things you own, what people would typically refer to as their “assets.” For the purposes of calculating eligibility for Medicaid LTSS (which uses the same resource criteria as Supplemental Security Income or SSI), all of the following count as resources:

• Banking, savings, investment, and retirement accounts
• Cash
• Life insurance policies with a cash surrender value above $1,500
• Real estate/property (other than your main residence and the land it occupies)
• Digital currency, such as cryptocurrency and NFTs
• Vehicles (other than 1 exempt personal vehicle)
• Burial funds with a value in excess of $1,500 per covered individual
• Other valuables and items that can be readily exchanged for cash

Some resources may be exempt beyond these categories, such as land or property used by you or your spouse for a trade or business. Refer to a Medicaid eligibility attorney in New Mexico for more details.

To meet Medicaid LTSS eligibility criteria, each applicant can only own up to $2,000 in combined resources. If a spouse is not applying, they can have up to $162,660 (as of 2026) in addition to the $2,000 in resources assigned to the applicant spouse.

3. Income Limits

To be eligible for Medicaid LTSS, you must earn less than $2,982 in monthly income. Income includes social security payments, rent from properties, salary, wages, stock dividends, pension payments, alimony, and all other regular sources of monthly financial support.

For married couples, their combined income cannot exceed $5,964 a month, regardless of whether one or both spouses are applying.

What If I Make Too Much Income or Am Over the Resource Limit?

Families who don’t meet the income and resource eligibility criteria for Medicaid LTSS still have options. 

If they formed an irrevocable asset protection trust before the start of the five-year Medicaid look-back period in New Mexico, their assets may not be counted towards their resource limit, although income derived directly from the trust would be. 

If they neglected to form a Medicaid asset protection trust, they can spend down excess resources on qualified expenses to get below the resource cap.

They can also form a Miller Trust at any time to set aside income, saving it for approved financial support of the covered individual. 

These individual strategies are covered in greater detail in the sections below.

You can refer to a Medicaid eligibility attorney in New Mexico for more information on these strategies and others that may be applicable to your unique situation.

Asset Protection and the Medicaid Look-back Period in New Mexico 

When determining an applicant’s level of available resources, Medicaid eligibility screeners will not only look at current resources, but they will also examine the applicant’s history of property transfers and other substantial transactions made over the past 60 months (5 years, total). This is referred to as the “look-back” period, and it stretches back from the moment the applicant is expected to begin receiving covered services.

If any transfers were made at below fair market value during the look-back period, these transactions will be reversed. The resources given away for free or below fair market value are then counted as available resources once more.

In other words, you can’t just give away property to your children or other loved ones to qualify for Medicaid, at least not within five years of beginning coverage.

One strategy to manage this issue is to create a trust that offers asset protection for Medicaid in New Mexico. Here’s how that would work:

• The trust creator (who is known as the “grantor,” “settlor,” or “trustor”) arranges for assets to be transferred to the trust’s ownership.
• A person who is known as the “trustee” is responsible for managing the trust and its assets. Crucially, neither the grantor nor their spouse can serve as a trustee. However, any other qualified individual, including an adult child or another non-spouse family member, can serve in the role.
• The trust is allowed to pay distributions to support the grantor and their spouse, which can come from income sent to and/or generated within the trust. The amount of these distributions should be set according to the current Medicaid income limit.
• When the grantor passes, the trust can remain intact or distribute its remaining assets to beneficiaries. Note, however, that it may be advisable not to include a spouse as a death beneficiary, in case they need to qualify for Medicaid LTSS at some point.

Setting up this type of trust is often expensive, and there will be ongoing costs to maintain it. Further, if there are any issues with the trust, its creator still may not qualify for Medicaid, and their assets may be largely irretrievable because the trust is irrevocable. Because of these risks, it is in your best interests to work with an experienced attorney when forming Medicaid trusts in New Mexico.

What Is a Miller Trust?

A Miller Trust (also sometimes known as an income diversion trust, a qualified income trust, or a QIT) can be used at any point to help an individual qualify for Medicaid LTSS. These simple trusts basically function as a bank account that accepts all of the applicant’s income. 

The applicant is only allowed to draw a minimal personal needs allowance (PNA) from the trust account. In New Mexico, the PNA amount is $97 per month in 2026. If a spouse requires support, they can draw a monthly maintenance needs allowance up to $2,643 (for New Mexico Medicaid LTSS recipients, as of 2026).

Importantly, the remaining balance in this account reverts to the state of New Mexico when the program participant passes.

When Should I Get Medicaid Spend Down Assistance in New Mexico?

If an applicant is over the resource limit and they neglected to form an asset protection trust in time, they can still reduce their countable resources by spending them on qualifying expenses. This process is known as a “spend down,” and it’s often the only option if applicants aren’t able to form a trust to protect assets in New Mexico prior to the start of the look-back period.

There are restrictions on what these resources can be spent on without violating Medicaid policies. Typically, the recommendation is for these expenses to go towards improvements to non-countable assets, such as the applicant’s primary residence or personal vehicle. For example, they can install an entrance ramp for their home or a wheelchair lift for their vehicle.

They can also spend their resources on other qualifying medical care essentials, including appointment co-pays and medical devices. They may be able to spend the resources on other expense categories, as well, such as for the repayment of debt or the prepayment of funeral and burial expenses.

Note that spend-down activities will be heavily scrutinized. For this reason, you should consider speaking to an attorney for Medicaid spend-down assistance in New Mexico. They can help you strategize your spending to avoid running afoul of Medicaid rules while still obtaining the maximum benefits.

Reach out to an Experienced New Mexico Medicaid Planning Law Firm

If you or a loved one needs Medicaid long-term care coverage, New Mexico Financial & Estate Planning Attorneys can assist you. We are happy to provide you with guidance on eligibility criteria along with strategies to help you qualify. We can also help you create a trust or use other strategies available, based on your unique situation.

Get in touch with an experienced elder law attorney in New Mexico who cares about your future when you call our firm at (505) 503-1637 or contact us online.