Is It Too Late to Protect Assets When a Spouse Enters a Nursing Home?

Many couples face a daunting challenge when one spouse requires nursing home care: How to manage the astronomical costs without depleting their life savings. 

A common misconception is that once a spouse enters a nursing home, it's too late to protect your assets. As an experienced estate planning attorney, I'm here to assure you that this is not the case. While earlier planning offers more options, there are still strategies available even after nursing home admission.

Understanding Medicaid and Nursing Home Care

Medicaid is often the primary source of funding for long-term nursing home care. However, to qualify, applicants must meet strict financial criteria. This often requires "spending down" assets, which can be a significant concern for the spouse remaining at home.

Asset Protection Strategies

Even if your spouse is already in a nursing home, consider these options:

• Spousal Income and Asset Allowances: Medicaid provides protections for the community spouse (the one not in the nursing home):

• Monthly Maintenance Needs Allowance: This allows the community spouse to keep a portion of the institutionalized spouse's income4.

• Community Spouse Resource Allowance: The at-home spouse can retain a certain amount of countable assets without affecting Medicaid eligibility.

Medicaid Compliant Annuities

These financial products can help convert excess assets into an income stream for the community spouse while potentially accelerating Medicaid eligibility (click here for more info on Medicaid).

Medicaid Compliant Annuities (MCAs) are specialized financial tools used in Medicaid planning to help individuals qualify for long-term care benefits while preserving some assets.

Spend-Down Strategies

Strategic spending of assets on exempt items or services can help you reach Medicaid eligibility without completely depleting your resources.

• Asset Transfers:         

While transfers made within five years of applying for Medicaid may incur penalties, some transfers to certain family members or into specific trusts may still be permissible.

Here are some key spend-down strategies to help reach Medicaid eligibility while preserving resources:

1. Home Improvements and Repairs

2. Pay Off Debts

3. Pre-Pay Funeral and Burial Expenses

4. Purchase an irrevocable funeral trust or prepaid funeral plan

5. Buy a new car (one vehicle is typically exempt)

   
   

These are just a few examples of ways to spend down to increase Medicaid eligibility.

Remember, Medicaid rules are complex and vary by state. Always consult with an elder law attorney before implementing spend-down strategies to ensure compliance with current regulations.

The Importance of Professional Guidance

Navigating Medicaid rules and asset protection strategies is complex. Each state has its own regulations, and missteps can result in costly penalties or delayed eligibility. Working with an experienced estate planning attorney is crucial to developing a plan that protects your assets while ensuring necessary care.

Act Now to Preserve Your Legacy

While it's never too late to start planning, the sooner you begin, the more options you'll have. "Even if your spouse is already in a nursing home, there are still opportunities to protect a significant portion of your assets".

Don't let the misconception that it's "too late" prevent you from taking action.

Contact our office today to schedule a consultation. We'll review your unique situation and develop a tailored strategy to protect your assets and secure your financial future.

Take Control of Your Future Today!

Your peace of mind is just a phone call away. Reach out now at 102-456-7890 or fill out our contact form to schedule your consultation. Together, we can navigate this challenging time and make sure that your legacy remains intact!

About the Author

Christina has been practicing law in New York State, for over 7 years. She is a Pace University School of Law graduate. After passing the New York and New Jersey Bar Exams, she went on to work for several law firms with primary practice areas in Real Estate, Estate Planning, Estate Administrations, Guardianship proceedings under Article 81 of the Mental Hygiene Law, and Article 17A, Medicaid planning and applications. Christina is also certified as a Guardian, Court Evaluator, and Attorney for the AIP under Part 36 of the Rules of the Chief Judge.