When someone’s spouse needs nursing home care, the first fearful question of the healthy spouse is, “Will I lose my home?” And, fortunately, the answer is no, You will not lose your home. Why is this the answer? Because Federal Medicaid law has provisions to prevent the impoverishment of the spouse who still lives at home. Connecticut’s regulations follow that law and specifically exempt certain assets which the healthy spouse is allowed to keep.
Clients often ask, “Isn’t it a good thing to have my bank accounts jointly owned with my children?” There is no simple answer, because it depends on the circumstances you face. Often, the question comes about in the context of “Will it let me avoid Probate?” The answer there is yes, but under Connecticut law that does not excuse the filing of an Inheritance Tax Return. There is no tax if you are below $3.5 million, but that does result in a small Probate fee.
It is now official in Connecticut, that if your husband or wife needs nursing home care, you can protect not only the family house, plus about $110,000, but also a significant amount above the $110,000 by buying an immediate annuity with special conditions. This came about on August 11, 2010 in a Federal Court decision, Lopes v Starkowski. The State of Connecticut has decided to appeal the decision, so there is some degree of uncertainty. But if successful, all Connecticut residents, in a husband and wife situation, could keep extra assets, above and beyond the $110,000 previously allowed.
If we had a crystal ball and could see into the future, we would not need to plan ahead for end of life decisions. We have seen many clients through the years where a spouse had a sudden stroke making it impossible to communicate with the family. Neither the spouse nor children knew anything about the financial or medical information. Besides having to locate important documents, the family is then left to make their own decisions about long term care and may have difficulty dealing with medical personnel or financial institutions.