Jones Elder LawProtecting Your Home, Savings & Spouse.Talk with an attorney636.493.3333When your spouse needs nursing-home care
A married couple should not assume that nursing-home costs must consume the savings both spouses built together. Missouri Medicaid rules include important protections for the spouse who remains at home, and additional planning may protect substantially more.
Speak with an attorney before spending down or applying. A premature gift, sale, withdrawal, or application can eliminate options that may otherwise remain available.
Protection for the spouse at home
The rules recognize that one spouse may need institutional care while the other must continue paying for a home and ordinary living expenses. The correct plan addresses resources, income, ownership, taxes, and timing together.
A transfer to a child can create a penalty period under Medicaid’s five-year lookback and may also cause unintended tax consequences. Even a well-intended transfer of the home or savings can delay eligibility and cost the family money.
One of the worst things a family can do is file a Medicaid application while countable assets remain above the exempt amounts. The application can be denied or delayed while excess countable resources remain, locking in the loss of life savings that might otherwise have been protected. The protection plan and required transactions generally should be completed and documented before filing.
Cashing out retirement accounts, selling real estate, or surrendering an annuity may trigger taxes, penalties, or loss of a planning opportunity.
Identify accounts, real estate, income, insurance, annuities, prior gifts, estate-planning documents, and who has legal authority to act.
The most costly misunderstanding
Families are often told what the healthy spouse may keep under the initial Division of Assets calculation and assume everything above that amount must be paid to the nursing home. A complete spousal asset-protection review asks a second question: what lawful steps can protect additional resources before the application is filed?
Jones Elder Law does not treat the Division of Assets calculation as the end of the analysis. We develop a coordinated spousal protection plan designed to protect additional savings and preserve the financial security of the spouse at home.
Two very different financial outcomes
Division of Assets identifies the amount protected under the initial calculation. The family must then decide whether to begin spending everything above that amount or determine whether additional lawful planning can protect it.
Without additional planning
Consider a couple with $500,000 in countable savings. If the family relies only on the standard Division of Assets calculation, roughly $331,000 may remain above the spouses’ combined protected resource amounts and be exposed to nursing-home costs before Medicaid eligibility is established.
With a coordinated spousal plan
When the facts permit, a properly structured plan may protect the home and convert the excess countable savings into a protected income stream for the healthy spouse without creating a penalty period. In the same example, nearly all of the couple’s savings may be preserved for the spouse at home rather than paid to the nursing home.
Consider a married couple whose home is worth $375,000 and who have $500,000 in savings and investments when one spouse enters a nursing home. The family may initially believe they must continue paying the nursing home until nearly all the savings are gone.
With proper planning, however, the couple may be able to preserve the home, protect a substantial portion of the savings for the spouse who remains at home, and establish Medicaid eligibility much sooner than the family expected. The exact amount that can be protected depends on the couple’s assets, income, prior transfers, and the planning options available before the application is filed.
The important point is that the family should not begin spending down or file a Medicaid application until an experienced elder-law attorney has determined what can be protected and established the steps needed to protect it.
A plan carried through to approval
“When my husband needed nursing-home care, I was terrified that I would lose the savings we had spent our lives building. Stephen showed me that I did not have to spend everything before Medicaid could help. Jones Elder Law developed a plan that protected me financially while helping my husband qualify for the care he needed. I cannot describe the relief that gave me.”
— Deanna, Jones Elder Law client
Questions from healthy spouses
No. Many lawful Medicaid planning strategies can be implemented after admission. The available strategy depends on whether the applicant is married or single, the assets involved, prior transfers, timing, and the applicant’s legal capacity.
Not before the full situation has been reviewed. Paying legitimate expenses can be appropriate, but an unguided spend down may consume assets that could have been protected for a healthy spouse or family.
Usually, no. The asset-protection plan and required transactions should be completed before filing. One of the worst things a family can do is file while countable assets remain above the exempt amounts. That can cause a denial or delay while excess countable resources remain and lock in the loss of savings that might otherwise have been protected.
Often, yes. Division of Assets is the starting calculation, not necessarily the final answer. Missouri planning can allow savings above the initial allowance to become protected income for the healthy spouse when the strategy fits the facts.
The healthy spouse should have every asset, source of income, prior transfer, and ownership arrangement reviewed before the application is filed. The plan should identify what is already protected, what additional savings can be protected, and which steps must be completed before filing.
Yes. When retained for a Medicaid crisis plan, the firm develops the strategy, tells the family exactly what to do, prepares and files the application, responds to state requests, and advocates for the family until a decision is made.