Many times, couples come to see me, and while one spouse is in relatively good health; the other is what I would describe as the “sick spouse”. Their situations vary tremendously depending on their age, years married, children from each side, assets, and income. However, many times the trigger that causes someone to contact the office is the declining health of one of the spouses. The cause could be natural aging or could be a progressive disease such as Parkinson’s disease or some form of dementia; or even possibly a stroke, or from an accident such as a fall, or vehicular accident.
The first step in our meeting is to ascertain their health, family dynamics, concerns, goals, assets/income, and what documents such as a Last Will and Testament, Trust, Transfer on Death Deed (T.O.D. Deed), Durable Power of Attorney, Healthcare Representative Appointment, and healthcare directives, beneficiary designations, and funeral planning that are already in place.
As to assets preservation if they need help at home, assisted living, or a nursing home for the sick spouse, it must be ascertained what the clients have regarding long-term care insurance, or if the sick spouse is a disabled veteran that is entitled to coverage based on their high level of disability related to their military service.
If there is not any other form of full payment for long-term care, Medicaid planning is discussed. The gifts, if any, to loved ones within the last 5 years will need to be ascertained. One question that is brought up many times is that they believe it is too late; but this is not true. If you have a sick spouse, and the other spouse is independent enough to live in the community, there are legal methods to protect almost all the couple’s hard-earned lifetime savings.
Let me explain some of the basic laws, rules, and definitions. An “institutionalized spouse” (sick spouse) is the spouse needing long-term care services and possible Medicaid assistance to pay. A “community spouse” is a healthy spouse that doesn’t currently need assistance or long-term care. Since 1989, Indiana has applied spousal impoverishment laws that allow the community spouse to legally retain some countable assets and not go broke (“impoverished”). In addition, the community spouse can also have exempt assets such as unlimited real estate in his/her name whether income-producing or not; one car of any value; and retirement accounts in his/her name.
A free consultation with our office can determine the best steps to take at any stage.