Protection for A Married Couple

When your spouse suddenly needs nursing home care or full-time care at home, it can be emotionally draining and frightening because of the fear that all your hard earned life’s savings will be at risk. However, if you get the advice you need from an experienced elder law attorney, the average family should not have to lose their assets and can keep their home, their car, and in most cases all of their financial assets. That bears repeating. For the average couple, all of their assets can probably be protected if they are represented by an attorney who knows the Medicaid rules, and who is representing them.

The rules are that the Department of Social Services will determine the total assets the couple owns as of the date of institutionalization which is the date a doctor says a person physically needs the nursing home level of care to safely stay at home. If it includes a house, the house is a protected asset, and will not be counted. It and other assets can be transferred to the healthy spouse at the last minute under the federal law which is designed to prevent the impoverishment of the healthy spouse. I emphasize, it is not too late to transfer assets to the healthy spouse, but home care will not be retroactive, and coverage begins after the state approves the application.

In addition to the home, one car is protected. Then the state adds up all other assets in both spouses’ names, and says the healthy spouse can keep half, but not more than $148,620. The “spenddown” rules for a married couple do not mean that the assets are lost. It simply means the assets must be put in the healthy one’s name and owned and invested in accordance with the rules.

So if a couple’s total life savings are $300,000, the healthy spouse can keep half but not more than $148,620, and the sick spouse can have $1,600, for a total of $150,220. That leaves $149,780 ($300,000 less $150,220) that must be spent down in accordance with the rules. If you have a mortgage, or credit card debt, that could be paid off. You could buy prepaid funeral contracts, or do repairs to your house. You may have an older car and that could be traded in toward a new one. The rules allow you to buy items you need for your house, such as a new refrigerator or replacement windows. But let’s say there is nothing else you need to spend on for yourself, or your house, and you still have money left over. The rules allow the healthy spouse to
buy a special annuity called a single premium immediate annuity. If that annuity meets the strict requirements of the federal law, it will no longer count as an asset and the sick spouse will qualify for Medicaid (Title 19) to pay for the long-term care. This can also work for home care. So whether you have $50,000 left over or several hundred thousand, the rules allow you to protect them if you follow the rules. Congress adopted this law so that families would not be totally impoverished.

The point is, you need to have someone on your side who knows the rules and can apply them to your personal situation. There are cases where families under the stress of needing care are steered to companies that say they will “do the Medicaid application” for a fee. The family may not be told that some or all of that family’s life savings can be saved, and unless the family immediately seeks legal advice, every month that goes by may result in losing $17,000 or more because that is the typical monthly cost of a nursing home in Connecticut.

To repeat, the federal and state laws do allow the typical family to save all their assets if one of the spouses needs long term care at home, or in a nursing home. Don’t let the emotions of that difficult time overwhelm your judgement. Seek good advice from an attorney who represents you and is on your side and be aware that a company that a nursing home directs you to is not a law firm, cannot give legal advice, and is not bound by the ethical rules that govern attorneys to work in the best interest of their clients. Nursing homes have a financial incentive not to have your loved one go on Medicaid because the rate you pay them privately could be substantially more than what Medicaid pays. Don’t pay money to the nursing home or home care that can be protected for your family under the Medicaid law.