You may see it coming: Much as you want to and hard as you try, you just can’t take care of your ill spouse at home any more. At this emotionally difficult time, the last thing you need is the stress of not knowing where to find the money to pay for the steep costs of institutional care or not being prepared and losing your life savings or family home to the Nursing Home. Unfortunately, it happened to my parents. My dad’s health was declining and my mom was bravely caring for him at home. Until one day my dad took a bad fall at home and hit his head on the floor and his forehead began to bleed. My mom had no choice but to call 911 for an ambulance which transported my dad to the hospital. The doctors determined it was no longer safe for my dad to return home because he was a fall risk. The slippery slope of aging while being incapacitated began with my dad being transferred from the hospital, to the rehab facility, to the nursing home. While my family worried about my dad’s declining health, we also worried about how my parents would pay for the long term care expenses. Would the family home they both worked so hard for be protected? Read on because you will learn a lot!
Advance planning is a must. As soon as you can – ideally at least five years before serious health problems arise – take advantage of many elder attorneys’ willingness to talk with you for free, or for a modest initial-consultation charge. We teach free educational estate planning & elder law workshops at our Learning Center in Hanover twice per month. We also provide a library of educational videos on our website at elderlawcare.com
We are here to help you navigate the complexities of the Medicaid program. This is a governmental fund available to meet the staggering expense of institutional care, but the ins and outs of the qualification rules are complicated and mistakes can be costly. Here’s a thumbnail to help you grasp what your attorney will be telling you.
PRE-PLANNING: We strongly recommend that you plan when you are “alive and well” versus being “alive and not-so-well.” Pre-planning is the most prudent and wisest thing to do because it puts you and your family in control. It also gives you the opportunity to protect everything you worked hard for – for the people you love the most.
CRISIS-PLANNING: Is typically for people who waited too long. They waited until the “two-minute” warning in life and now they are incapacitated and their spouse and children are panicked trying to save their health and the family assets. Crisis-planning significantly limits your planning options and puts your hard earned family assets at risks. It also creates a tremendous about of undue stress on the family and often ignites family fighting and feuds. What do you want for your family? How do you want to be remembered?
If either you or your spouse became completely incapacitated how would you pay for the $15,000.00 per month Nursing Home?
From my experience, if you worked with a qualified elder law attorney and pre-planned creating an Irrevocable Medicaid Asset Protection Trust (MAPT) five years in advance you would be much better off.
If you continue to wait and procrastinate you likely will be facing the stresses and messes of Crisis Planning. The choice is yours because nobody makes you do estate planning. In fact, who stands to benefit when you don’t plan?
RULES OF MEDICAID PLANNING:
“Resources” and “Income”: The Difference
Medicaid assistance is available only to those who own very little. The Medicaid rules determine what “owning very little” actually means. A person requiring Medicaid benefits can only own around $2,000.00 of what Medicaid calls “resources.”
Resources include cash in the bank, CDs, the cash value of insurance policies, investments, and the like. Income includes regular paychecks, Social Security, or payments received for child support. Both income and resources are potentially “counted” by Medicaid as “available.” To qualify for assistance, available income and resources must be carefully spent or transferred away.
Exempt Resources
Some resources are not counted or, in other words, are exempt. This means the Medicaid rules exclude them from adding up to the $2,000.00 limit. These resources are sheltered from Medicaid’s requirement that the applicant must spend down almost everything before assistance will be available.
Typically your principal residence, one motor vehicle, household goods and furnishings, medical equipment, jewelry, and other items are exempt. This means that an ill spouse can still qualify for Medicaid assistance even if the couple owns those resources. There’s no need to give them away or sell them to qualify. However, Medicaid will look to lien your family home or asset after you pass away after receiving Medicaid benefits.
The distinction between “exempt” and “non-exempt” assets can be tricky and should first be assessed by a qualified elder-law attorney before any action is taken.
What the Well Spouse Can Keep
The Medicaid rules permit a spouse who remains at home to keep a portion of the couple’s resources. This is known as the “community spouse resource allowance” (CSRA). Of course you’d like to see the well spouse keep as much as possible within the CSRA limits. Planning can arrange the distribution of resources to make that happen.
Here is where the difference matters between “resources” and “income.” Medicaid distinguishes between the well spouse’s income and the couple’s resources. Resources over the CSRA limit must be spent down or carefully transferred. As to income, the well spouse can keep it up to a certain level, so he or she will have enough money to live on. The Medicaid rules call this the “monthly maintenance needs allowance” (MMNA).
For example, if the well spouse gets Social Security benefits of only $500.00 a month, but her allowed MMNA is as high as $2,000.00, it makes sense to convert some of the couple’s resources into raising her income up to the MMNA limit. This is not a simple matter, though, and should be done only on the advice of a qualified elder-law attorney.
Planning for Medicaid eligibility can be complicated. Please consult an elder-law attorney as soon as possible. The sooner you plan, the more strategies are available to protect your resources. An initial consultation with a qualified elder-law attorney, for free or for a modest amount, could save you many thousands of dollars. When is the best time to fix a leaking roof? On a sunny day.
Don’t delay!
Next steps: TAKE ACTION and Attend our FREE educational Estate
Planning & Elder Law workshop by calling our Elder Law Care Team at 781-871-7526 or email pat@elderlawcare.com because seating is
limited and our Learning Center fills up quickly!
This information is intended to be educational and for informational
purposes only and is not a substitute for hiring a qualified estate planning or
elder law attorney. Learn more here because we are here to help you: elderlawcare.com
