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Protecting your Assets when a Spouse Needs Long-term Care

When a loved one is ill, there are a lot of concerns. Is she getting good care? How will we pay for the care? What happens if he cannot come home? Among the concerns that trouble people the most is the fear that the cost of long-term care will exceed one’s financial resources. In Florida, as in most states, Medicaid has become the primary payer of long-term nursing home care. Since nursing home costs are quickly rising, it is no wonder many people worry about where the money will come from. To complicate things, remember that Medicaid is based on resources, so if your assets are too high to qualify, then you cannot receive Medicaid.

For many folks, the family home is the largest asset available. Outside of non-liquid assets like pensions or life insurance, a home is one of the largest assets that seniors often hope to leave their children upon death. Therefore, it can be very troublesome to think of being forced to sell the house to pay for nursing home care at the end of one’s life. But there is good news.

What it takes to get Medicaid assistance for nursing home care

To qualify for Florida Medicaid, you must meet several broad tests. First, you must require it. This might seem intuitive, but upon applying for assistance, the state’s office of elder affairs will perform a “Comprehensive Assessment and Review for Long-Term Care Services” (CARES). This review is done in order to determine whether long-term care is even warranted. To meet the test, nursing home placement must be “medically necessary.” Next, your assets are reviewed to determine whether you have a legitimate financial need. To meet this criterion, you must have less than $2,000 in total qualified assets and no more than $2,199 in monthly income (as of 2016). Therefore, simply owning a home will easily exclude most people, as the home is an asset worth far more than $2,000. This may cause some to worry about what happens to the house upon going into the nursing home.

Community Spouse Doctrine

This often-mentioned but rarely understood term simply means that the income and assets of a community spouse are excluded from Medicaid’s calculation of the income and assets of the applicant. So, if your spouse is going to a nursing home for extended long-term care, it is wise to make sure all assets and income are yours and not those of your spouse. But if you begin to make adjustments at the last minute, it can be much more difficult because of a five-year look back period. This means Medicaid will scrutinize every transaction (including transfers, sales, gifts, and deeds) that you have made in the last five years. Even a gift to a spouse will be reviewed.

Nevertheless, despite Medicaid’s scrutiny, a community spouse cannot be forced into impoverishment. Therefore, the law allows a resource allocation of up to $119, 220 (2016). This means a spouse who owns assets solely can transfer quite a lot to the community spouse without running afoul of the rules.

Who can help me understand Medicaid?

There are a lot of people who offer to explain Medicaid laws, including financial advisors and insurance agents. However, beware of insurance companies and annuity salesmen, because these folks are interested in the profits that come from selling a product. They are not bound by the same rules and regulations as attorneys. In fact, the Florida Supreme Court has recently determined that non-lawyers who offer advice on Medicaid applications are engaging in unauthorized practice of law, which can carry severe consequences.

It is best to always retain the services of a uniquely trained elder law attorney who can carefully explain the complex Medicaid rules in Florida and help you make the best possible choices in your situation. The Millhorn Elder Law Planning Group offers elder law services through several conveniently located offices in the Villages. Call to discuss your Medicaid application today.

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