Medicaid Planning for the Married Couple

My asset protection team and I often meet with clients who have a spouse or parent who requires at-home caregiving services, or who resides in a skilled care nursing facility or assisted living facility. The clients’ top priority is to be able to provide the best available care for their loved one. They meet with me and my team to explore options that allow their loved one to receive the best available care, as well as to learn about ways to legally protect their life savings from having to be spent entirely on that care.

Medicaid rules provide special protections for the independent spouse of a nursing home resident, or someone who has been approved to receive at-home care / assisted living (through the Aged & Disabled Medicaid Waiver program), to make sure that he or she has the minimum support needed to continue to live at home, or in an assisted-living facility.

In general, an independent spouse, referred to as a “community spouse” may keep one-half of the couple’s total “countable assets” up to a maximum of $130,380.00 (as of January 1, 2021). Called the “Community Spouse Resource Allowance,” this is the most that a state may allow a community spouse to retain. A married couple with under $26,076.00 (as of January 1, 2021) in countable assets is under the asset limit to qualify for Medicaid assistance.

Medicaid initially considers assets of both spouses when calculating the Community Spouse Resource Allowance. The home, one vehicle of any value, and the IRA(s) of the community spouse are not counted. Assets held within in a properly drafted irrevocable trust for more than 5 years are not counted. Real estate owned solely in the name of the community spouse is not counted. Funds held within 529 College Savings Accounts are not countable. Irrevocable, pre-paid funeral arrangements of the Medicaid applicant and/or spouse, which name either the estate of the deceased or the State of Indiana as beneficiary of excess benefits, are not countable.

Countable assets consist of the following partial list: checking and savings accounts, cash, money market accounts, certificates of deposit, savings bonds, stocks, mutual funds, investment accounts, retirement accounts of the Medicaid applicant, the cash surrender value of any life insurance policies, annuities, and valuable collections and precious metals.

To protect the amount over the Community Spouse Resource Allowance, there are several legal techniques such as use of Medicaid-compliant annuity or a promissory note that can protect most of the couple’s hard-earned assets. Also, based on the clients’ situations, there are many other additional legal options that can be explored. Considerations of estate planning of the community spouse are put in place as well to further protect assets and provide for a surviving spouse on Medicaid if the community spouse would pass away first.

If you have a loved one who is already in, or headed to, an assisted living facility or nursing home, or have a loved one who needs or receives at-home care, contact my office today to schedule a free consultation to meet with my asset protection team to explore ways to preserve the maximum amount of assets that the law allows.

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