Using someone's assets to pay off debts may not directly protect estate assets from the government. However, since debts would be paid out of the estate, fewer debts mean more estate assets.For example, assets can be used to pay off credit cards or personal loans. Since available credit is not considered an asset, these payments do not affect the person's eligibility for medical assistance.
Paying off existing debts and obligations also doesn't qualify as a transfer that could result in a penalty if done within five years before the person applies for medical assistance.
In addition to paying debts, it's also possible to use assets to purchase exempt items. For example, the person could buy a new HVAC unit or new roof for their primary residence.
 Certain assets, such as a personal residence, a car, and other personal items such as furniture and clothing, are exempt from seizure by the government to recoup medical assistance.The homestead exemption covers the primary residence of the person on medical assistance if their spouse still lives in the home, or if the person is reasonably expected to return home after long-term stay in a nursing home.
For example, the homestead exemption would apply to the primary residence of an unmarried individual who was staying in a nursing home for several months to recover after hip surgery, but was expected to return home.
Keep in mind that people are expected to use the equity in their home to cover their long-term care expenses. The government will put a lien on the property if it is owned by the person on medical assistance.
For this reason, transferring the home to a trust may protect it for future generations.
Another way to protect the home is to transfer the deed to the person who would get it under a will or other estate plan, and then grant the person on medical assistance a life estate in the property.
However, the government can reach life estate properties as well in some circumstances. Contact an attorney if you're thinking about using this option to protect the estate assets of someone on medical assistance.
 If the person on medical assistance has regular bills that are due each month, you may be able to make advance payments on those bills using the person's liquid assets.Keep in mind that this doesn't preserve assets for the estate in a direct sense. However, advance payments for regular bills decrease that person's expenses while they remain in a nursing home.
Fewer expenses means more assets for the person's estate. It also means the person's spouse, children, or grandchildren aren't forced to pay these expenses on their behalf while they're in a nursing home.
Property taxes are a good regular expense on which you can make advance payments.
One benefit of making advance payments is that this sort of transfer can be made at any time. Even if made during the look-back period (in other words, less than five years before the person starts medical assistance), these payments are considered totally valid and won't affect the person's eligibility for medical assistance.
 A person on medical assistance can pay a family member for services. However, those services must be provided under a written contract. The family member's payment cannot exceed the usual payment for similar services. These payments can be used to transfer assets to a family member that would have been passed on using a will, trust, or other estate planning document.
For example, suppose Sally wants to leave her son $10,000. She has to spend down her assets before entering the nursing home so she will qualify for medical assistance.
Sally drafts a contract with her son under which she pays him $1,000 a month to serve as caretaker and landscaper at her home while she is in the nursing home.
Provided the payment Sally has agreed to make are similar to what other full-time caretakers and landscapers would earn, this payment would not be considered an unlawful transfer that would affect Sally's eligibility for medical assistance.
Gather information about the person's debts.
Identify exempt assets.
Make advance payments.
Document payments to family members.
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