How to Spend Down Assets for Medicaid in Washington Without Losing Everything

To qualify for Apple Health long-term care coverage (COPES, AFH, ALF), countable assets must be at or below:

$2,000 for a single applicant

$3,000 for a married couple when both apply

For a married couple when one needs care, Washington applies spousal impoverishment rules — the community spouse keeps a Community Spouse Resource Allowance (CSRA), which can be up to roughly $154,140 in 2024.

Counted: cash, checking and savings, CDs, stocks, bonds, mutual funds, retirement accounts (in pay status), real estate other than the primary home, second cars, life insurance with cash value, and most other liquid assets.

Exempt: the primary home (if occupied or with intent to return, equity caps may apply), one vehicle regardless of value, household goods and personal items, a prepaid burial up to $1,500 plus a designated burial plot or crypt, and certain pre-need funeral arrangements.

Spend-down means converting countable assets into exempt assets or legitimate expenses. Common legal moves:

Pay for care while still private pay. Every month at an AFH is spend-down. This is by far the most common path.

Pay off the mortgage on the primary home (which is exempt).

Home improvements and accessibility upgrades — a new roof, ramps, walk-in tubs, generator.

Prepay a burial contract through a licensed funeral home, irrevocable.

Buy a reliable vehicle that the household uses.

Pay off debts, including credit cards and any legal or medical bills.

Washington Medicaid examines five years (60 months) of financial history when processing a long-term care application. Any uncompensated transfer of assets during the lookback — gifts to children, transferring property below market value, paying a family member without a contract — can trigger a transfer penalty period during which Medicaid won't pay.

The penalty is calculated by dividing the transfer amount by the state's average monthly nursing home cost. Result: a $60,000 gift could mean six to seven months of paying privately before Medicaid kicks in. Do not transfer assets without legal advice.

After a Medicaid recipient dies, Washington tries to recover what it paid for their care from the estate. This is Medicaid Estate Recovery. The primary asset typically targeted is the home — which was exempt during life but becomes a recoverable asset after death.

Exceptions and hardship waivers exist (surviving spouse, disabled child, sibling with equity interest). Estate planning, including the use of trusts or careful titling, can sometimes preserve the home for heirs — but it's complex and requires real expertise.

If you have assets above the limit and care needs are approaching, an elder law attorney earns their fee many times over. Hire one if you're navigating spousal impoverishment, considering a transfer, holding significant assets in retirement accounts, or want to preserve a family home.

The Washington State Bar Association Elder Law section maintains a public referral list (wsba.org). Look for attorneys with the CELA (Certified Elder Law Attorney) designation. COPES eligibility →

Q: Can we give the house to our kids? A: Not within 5 years of applying — it triggers a transfer penalty. With early planning, sometimes; talk to an attorney.

Q: Are IRAs counted? A: Yes if in pay status; the rules are nuanced. Get advice before drawing down.

Q: Can my spouse keep our investments? A: A portion, yes — under the CSRA rules. The specifics depend on total assets and timing.

Q: How long does the application take? A: 4–8 weeks once submitted. The financial review is the slow part.