If your spouse is required to enter a skilled nursing facility it is not necessary for you to “give away” all of your assets to protect your assets from the cost of your spouse’s nursing home care.
Assuming that you and your spouse do not have adequate assets, or long term care insurance, to pay for your spouse’s long term care needs in a skilled nursing facility, you will want to apply for and obtain Medicaid benefits to pay for your spouse’s nursing home care. There are two financial critieria that must be met to qualify one for Medicaid benefits to pay for nursing home care: an income test and an asset test.
For the purpose of answering this question, we will assume that your spouse has met the income requirement and will address only the question of meeting the asset test to qualify for nursing home benefits from Medicaid.
The spouse who is residing in a skilled nursing facility is called the “institutional spouse” in the language of Medicaid. The spouse who remains at home is called the “community spouse.” To qualify for Medicaid benefits to pay for nursing home costs, the institutional spouse can have no more than $2,000 of “countable” assets, or resources, and the community spouse can have no more than $113,640 (for 2012) of countable resources. Some assets and resources are considered to be “unavailable” for Medicaid purposes.
If your spouse is required to have skilled nursing home care, to qualify your spouse for Medicaid benefits to pay for the nursing home care, it is necessary for you have no more than the allowed amount of “countable” or “available” resources ($113,640), and your spouse can have no more than the $2,000 of countable resources. If your and your spouse’s assets exceed those levels then it is necessary to restructure or “spend down” your and your spouse’s assets to receive Medicaid benefits to pay for your spouse’s nursing home care.
Giving away your assets will not work! Medicaid law provides that any transfer of an asset for less than fair value consideration received by the person transferring the asset is a “uncompensated transfer.” A substantial penalty period is applied whenever there is one or more uncompensated transfers by you or your spouse within 60 months (5 years) of your spouse applying for Medicaid benefits to pay for nursing home care. By giving away assets you may be creating a penalty period that will effectively prevent your spouse from receiving Medicaid benefits to pay for nursing home care.
There are a number of options available to you and your spouse, to legally reduce your countable resources so that your spouse can qualify for Medicaid benefits to pay for nursing home costs, without creating a penalty period. Some of the rules and laws prohibiting the transfer of specific assets to family members have exceptions that in some cases will allow those assets to be transferred to certain family members. Sometimes countable assets can be converted to non-countable assets without penalty and without negatively affecting your spouse’s eligibility for Medicaid benefits to pay for nursing home costs. In other cases, the “spend down” of assets can be accomplished by preserving assets for the community spouse and other family members.
The objective of this type of Medicaid planning is to provide for the preservation of family assets for the financial support of the community spouse, and to provide resources for the spouse who is residing in the skilled nursing facility to supplement the $35 monthly allowance for the institutional spouse’s personal needs – hardly enough to provide for hair care, much less other personal needs of the spouse residing in the nursing home.
Giving away your assets is not going to work to qualify your spouse in the nursing home with Medicaid benefits to pay for the nursing home costs. Careful planning must be used to ensure the preservation of family assets without reducing or eliminating the institutional spouse’s eligibility for Medicaid benefits to pay for nursing home care. Compliance with a multitude of rules and exceptions is necessary to accomplish a legally sound spend down plan, and then careful implementation of the plan is also a necessity. Otherwise, the risk of doing something that will cause a serious penalty period, or potentially complete inelgibility, for receiving Medicaid benefits to pay for nursing home costs will occur.
Various appellate court judges have made statements in legal decisions over the years that the Mediciad statutes and rules are second in complexity only to the Internal Revenue Code for taxes. Proper planning with experienced elder law attorney will help you obtain Medicaid benefits to pay for your spouse’s nursing home costs, without the necessity of you giving away all of your assets.
We have over fifteen years of experience preparing Medicaid spend down plans, assisting families obtain Medicaid benefits to pay for nursing home costs, and the filing and processing to completion of applications with the Florida Department of Children and Families (and its predecessor) for Medicaid benefits to pay for nursing home costs. If we can provide assistance to you and your family, please call 904-448-1969 (toll free 888-492-2468), or email us at Info@TheColemanLawFirm.net, to schedule an appointment to discuss how your can qualify for Medicaid benefits to pay for nursing home costs.
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