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How to Protect Assets if Spouse Goes into a Nursing Home

Elder Couple with Lawyer

As we grow older, the possibility that a spouse may need long-term care in a nursing home grows. It is a difficult part of life to face, and the questions that go along with it can be difficult as well. Among the main concerns is protecting your assets, should a spouse end up in a nursing home for long-term care. 

Chances are that if you are concerned about asset protection, you have a spouse who is applying for Medicaid in order to cover the cost of the nursing home. This makes complete sense, as nursing homes can cost hundreds of dollars per day, depending on where you are.

Fortunately, the Federal government has written the laws around Medicaid in order for an independent, healthy spouse to keep assets and income intact. The law, enacted by Congress in 1988, is called Spousal Impoverishment Protection, and ensures a spouse still living in the community will not go broke. The law ensures that a specific amount of assets and funds are protected, so the spouse living independently has enough to live on. 

How is income affected?

If your spouse is entering a nursing home, you will not lose your income, whether the source is employment or social security. In fact, your income is not considered when your spouse’s Medicaid application is filed and eligibility is determined. Only your spouse’s income will be considered for eligibility in the program. 

In some states, some contribution is required to nursing home costs for a spouse if your income exceeds a certain amount. However, it would not be enough of a contribution so that the independent spouse would not have enough to live on. 

Although your spouse may be entering a nursing home, that does not mean that you automatically lose their income. That depends on your own income, and how much you need to live comfortably and support yourself. The amount you would receive is based on the Minimum Monthly Maintenance Needs Allowance, which is the long way of saying the minimum monthly amount a healthy spouse is entitled to. (That amount, set by the Federal government as of 2019, is about $2,100. The maximum amount available is about $3,100.) What this means, generally, is that if your income falls less than between $2,100 and $3,100, you are most likely entitled to some of your spouse’s income. 

Your spouse in the nursing home should expect to lose the majority of their income if Medicaid is involved, as they are only allowed to keep a small portion of their monthly income. This is called a Personal Needs Allowance

What happens to other assets such as a home or retirement savings?

In terms of other assets, you will be able to keep your home if you continue to live in it, no matter what the value is. The home is considered exempt from counting toward Medicaid, as is your furnishings, personal effects, vehicles, and funeral plots and prepaid burials.

In terms of your 401K, IRA, stocks or other savings, the answer is a bit more complicated. It depends on the state you are in and the combined value. However, working with an experienced asset protection lawyer at The Mattar Firm will help you maintain these items and protect the assets. Unlike income, non-exempt assets are considered jointly owned and can be used toward Medicaid eligibility. 

However, there are ways to protect these assets by placing the money into exempt assets. Because of the laws surrounding Medicaid eligibility, it’s important to seek counsel from an experienced asset protection lawyer at The Mattar Firm, who can point you in the right direction. End of life care can be scary, and complicated. An experienced professional can help ease your concerns.

Contact The Mattar Firm 

At The Mattar Firm, our experienced asset protection lawyers can help protect your assets if your spouse goes into a nursing home. Contact our asset protection lawyers now at 239-222-2222.

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