Protecting Your Spouse/Assets/Annuities

Cohen & Oalican LLP, Boston, Raynham and Andover Present:

The Final Article in the Series "Protecting Your Assets from the Cost of Nursing Home Care"

Protecting Your Spouse/Assets

Medicaid law provides for special protections for the spouse of a nursing home resident, known in the law as the "community" spouse. The spouse of a Medicaid applicant is entitled to keep a portion of the couple’s assets. The community spouse is entitled to keep a maximum of $109,560 (2010 figures). This assessment is not affected whether the assets are jointly held by the couple or they are all in the name of the nursing home spouse. For example, if a couple owns $75,000 in countable assets on the date the applicant enters a hospital, the community spouse will be entitled to a resource allowance of $75,000. If they have $250,000, the community spouse can keep the maximum of $109,560.

Protecting Your Spouse/Annuities

One means of protecting assets for the community spouse is through the purchase of an annuity. The purchase of an annuity transforms excess assets that would otherwise make the nursing home spouse ineligible for Medicaid into a non-countable stream of income for the community spouse. In other words, we can typically protect all of a couple’s savings for the at-home spouse and obtain Medicaid eligibility for the nursing home spouse, even at the last minute through the purchase of a Medicaid qualified annuity. However, the annuity does not need to be purchased ahead of time. In fact, the annuity should not be purchased until the spouse enters a nursing home.

Conclusion

The possibility for a spouse or parent to need nursing home care is the greatest financial risk facing most seniors. Given the State’s tightening budget, it has become even more difficult to obtain Medicaid eligibility and protect your assets. For your own peace of mind, it’s more important than ever to hire an experienced Elder Law Attorney to create a comprehensive Asset Protection Plan to preserve all that you have worked for.

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP, Boston, Raynham and Andover Present Part 3: The Transfer Penalty and the Look-Back



The Transfer Penalty and the Look-Back


If you give away your assets it will make you and your spouse ineligible for Medicaid benefits for up to five years. When you apply for benefits, Medicaid reviews five years of bank statements in order to identify any disqualifying transfers. This is known as the “look-back period.” Any transfers that happened before the five year period are protected and do not have to be reported to Medicaid. However, if you apply for benefits during the look-back period, Medicaid imposes one month of ineligibility for approximately every $8,000 you give away. In addition, the clock does not start “ticking” on the ineligibility period until you are in a nursing and have spent down your assets. The easiest way to explain the transfer rules is by way of an example. Let’s assume Mrs. Smith transfers $24,000 to her grandson on March 15, 2009. On April 15, 2010, Mrs. Smith suffers a stroke and is admitted to a nursing home. Assume she spends down her assets below $2,000 as of August 2010. Because she would be applying during the look-back period, Medicaid would impose three months of ineligibility ($24,000 ÷ $8,000 = 3 months). The transfer penalty would not start until August 1, 2010 and would end in November 2010.

In Part 4 Cohen & Oalican will discuss Protecting Your Spouse/Assets


Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.