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My Spouse Has to Go into a Nursing Home...How Much Can I Keep?

Most people know that in order to qualify for Medicaid coverage of a long-term stay in a nursing home, the nursing home resident cannot own more than $2,000 in cash or other "countable" assets. But if you're married, and one spouse is going into a nursing home and the other is remaining "in the community" (i.e., continuing to reside at home), how much can the so-called "Community Spouse" retain? That amount is determined by a combination of both federal and state Medicaid laws. (Note that for these purposes it doesn't matter whether assets are titled in the sole name of the nursing home spouse, the Community Spouse, or jointly in both names.)


The basic rule is that the Community Spouse can retain 50% of all of the countable assets of both spouses, based on what they own when the other spouse first enters the nursing home for a continuous period of at least 30 days.


However, the most lenient states permit the Community Spouse to retain the first $101,640 of the couple's combined assets (this figure changes annually, to keep up with inflation); if their assets exceed twice this amount (i.e., $203,280), then the Community Spouse can only protect 50%. So if the couple's total assets are, say $150,000, since $101,640 is greater than 50% of $150,000, the Community Spouse can protect $101,640.


Most of the other states only permit the Community Spouse to protect one-half of the total amount of the couple's assets, with a ceiling of $101,640 and a floor of $20,328. So if the couple's total assets are under $20,328, the Community Spouse can retain it all; if their total assets are between $20,328 and twice that amount (i.e., $40,656), the Community Spouse retains $20,328; if between $40,656 and $203,280, the Community Spouse retains half; and if over $203,280, the Community Spouse retains $101,640. All clear now??? No? Well, some examples may help....


Examples:

    1. Assume a couple has total assets of $30,000. Half of that is $15,000, which is less than the "floor" amount, so the Community Spouse can protect $20,328; the balance must be "spent down" before the nursing home spouse can qualify for Medicaid.


    2. If the couple's assets total $100,000, then the Community Spouse can protect the full 50% amount: $50,000.



    3. If the couple's assets total $300,000, the Community Spouse's protected amount is limited to $101,640.


    In each of the above cases, once the Community Spouse's share is set aside, the nursing home spouse can keep $2,000, and the balance must be eliminated somehow before the nursing home spouse can qualify for Medicaid.


So what do you do with the "excess" assets over the limits discussed above? The Medicaid folks will tell you that you must "spend down" the excess assets, and if it's a small amount, that's certainly the simplest way to qualify.


Another alternative is for the couple to simply give away the excess, but that will cause a period of disqualification from Medicaid eligibility for the nursing home spouse.


The couple could convert some or all of the excess from "countable" to "non-countable," e.g., buying a new car, improving the house, purchasing a Medicaid annuity, etc.


Finally, many of these options are quite technical and require the skills and advice of an experienced elder law attorney. Unless you're an attorney "in the trenches" on a daily basis, it's easy to miss a recent state Regulation or Agency Letter and make a mistake that will wind up costing you $1,000s!


2007 by K. Gabriel Heiser


Attorney K. Gabriel Heiser has devoted his legal practice to Medicaid planning, elder law, and estate planning for the last 23 years.
NOTE: For more information on this topic and other Medicaid planning techniques, see http://www.MedicaidSecrets.com, which describes an exciting new 256-page book written by attorney Heiser, "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets." You don't have to go broke to get Medicaid to pay your nursing home bills, you just have to know the rules and planning techniques. For the first time ever, you can learn the inside secrets of high-priced estate planning and elder law attorneys, in attorney Heiser's new book.


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