Healthy Spouse Critical Documents

When one spouse of an elderly couple is on the road to long term care, and will need that care, either at home or in a nursing home, it is critical that they have certain documents in place to protect their assets if the “healthy” spouse should die before the sick one. If those certain documents are not in place, a huge amount of their assets may be lost under the Medicaid rules if the healthy spouse dies first.

To begin, many couples have done standard wills leaving everything to each other, and if both are gone, to the children, but have never done power of attorneys or medical directives to someone other than their spouse. But what if one of those spouses develops Alzheimer’s, or other debilitating conditions that require skilled care in a nursing home, or other place they live.

Medicaid laws allow the sick spouse to transfer any and all assets to the healthy spouse, and the healthy spouse can take various steps allowed by law to protect those assets. But what if the healthy spouse dies first with all those assets in his or her name? That old simple will that leaves everything to the surviving spouse who needs care, will cause those assets to be used to pay for the long-term care for the surviving spouse. That does not have to happen with proper legal planning.

The first step in planning should be to consult with an Elder Law Attorney regarding the two most important documents, a Power of Attorney and special Will to protect assets. 

The Power of Attorney in Connecticut has special powers that need to be explained so that assets and income can be handled to ensure that either spouse gets the best care and can protect assets if either one needs long term care. The law provides many options to protect those assets put into the healthy spouse’s name.

Second, the healthy spouse needs to do a special will, called a testamentary trust will.

This will needs to go through Probate in order to create the trust, which has the ability to protect the majority of the assets that are solely in the healthy spouse’s name. A deed to transfer the house to the healthy spouse is critical, as most couples own their home jointly in survivorship. The sick spouse must claim a statutory share which is in the income from one third of the assets, which is usually a very small amount. But if the couple still has their old wills leaving everything to each other, then the whole value of the home will be lost, if the healthy spouse dies first.

So the word to the wise is, married couples with one spouse needing long term care

should not download a standard form will on the internet, which just leaves everything to the spouse, and which the Medicaid rules will require to be paid to the state as reimbursement for care. The standard will does not take into account the Medicaid rules that could substantially

protect assets if one spouse needs long term care, resulting in a significant risk of losing substantial assets. Consulting with an Elder Law Attorney is critical especially if that surviving spouse is experiencing health issues and might need Medicaid in the future.

Attorney Halley C. Allaire is principal in the law firm of Allaire Elder Law, a member of the National Academy of Elder Law Attorneys, Inc., with an office at 271 Farmington Avenue, Bristol, (860) 259-1500, or on the web at www.allaireelderlaw.com. If you have a question, send a note to Attorney Halley C. Allaire and your question may be discussed in a future column.