Elder law attorneys assist clients that are trying to gain an understanding of the legal challenges that they may face when they attain senior citizen status. There are a number of different matters that are sources of concern, including elder financial abuse and other forms of abuse. We will look at these issues in the future, but in this post, we are going to focus on long-term care costs, Medicaid planning, and the rights of the healthy spouse.
The majority of people will need long-term care eventually, and many elders will spend time in nursing homes. This may not be something that you are anxious to think about when you are looking ahead toward all the fun that you expect to have during your retirement years, but it is important to prepare yourself for all eventualities. Unfortunately, Medicare will not pick up the tab if you do require the type of care that only a nursing home can provide toward the end of your life.
This is a very big deal, because nursing homes are extremely expensive. The median annual charge for a private room in a nursing home in New York in 2017 was $140,416. Nursing home costs have been rising year-by-year, so the figure could be significantly higher if you enter a nursing home 20 years from now.
Nursing Home Asset Protection
Medicaid is another jointly administered federal/state government health insurance program. You are probably aware of the fact that it is intended to provide coverage for individuals that have very limited financial resources. This program will pay for nursing home care, so it is the widely embraced solution for people that are looking for nursing home asset protection. However, it takes careful, informed planning to gain eligibility given the low asset limit. This threshold is $15,150 in our state, but there are things that are not considered to be countable. Your home is not a countable asset, but there is an equity limit of $858,000. You can also retain ownership of one vehicle that is used as a primary form of transportation.
Household items and personal effects are not counted, and you can retain ownership of wedding rings, engagement rings, and heirloom jewelry. An applicant may have up to $1500 in whole life insurance, and unlimited term life insurance is allowed. A burial plot and as much as $1500 set aside for final expenses would be excluded for Medicaid eligibility purposes.
Now that we have set the stage, we can get to the subject that serves as the title of this blog post. If you are married and your spouse is living independently as you prepare to enter a long-term care facility, your spouse would be referred to as the “community spouse” in Medicaid parlance. The community spouse is entitled to certain property rights under these circumstances.
First, as we stated above, your home is not a countable asset, but there is an equity limit. When a healthy spouse is remaining in the home, there is no equity limit at all.
Another major benefit is the Community Spouse Resource Allowance. This equates to half of the assets that are shared by the couple, but there is a limit. During the current calendar year, this limit is $123,600. There is also a minimum Community Spouse Resource Allowance of $74,820. To explain by way of example, let’s say that the couple had $100,000 in total shared assets. Half of that would be $50,000, but because there is a minimum, the healthy spouse would be able to keep $74,820.
Virtually all of the institutionalized spouse’s income must go toward the cost of the nursing home care, but there is an exception for married people. If all or some of the income is needed by the healthy spouse to maintain an acceptable standard of living, he or she could continue to receive this income. This is called the Monthly Maintenance Needs Allowance. In New York, the amount of this allowance at the time of this writing is $3090.
We Are Here to Help!
When it comes to assets that are countable, it is more difficult than it sounds to divest yourself of them to gain Medicaid eligibility. You cannot qualify if you give away assets within five years of the submission of your application. This is why intelligent, measured advance planning is crucial.
If you would like to discuss the details with one of our Medicaid planning lawyers, you can send us a message or call us at (585) 546-1734 to request a consultation.