Boston Massachusetts, Elder Law Attorneys Protecting Your Spouse
Also Serving Andover and Raynham Massachusetts
At the law office of Cohen & Oalican, LLP, our lawyers and staff provide clients with compassionate and comprehensive long-term care protection planning.
Planning for Future Long-Term Care Now Can Protect Your Spouse Later
For most of our clients, the possibility of needing care in a nursing home is the greatest financial risk that they face during their retirement. Most families cannot afford the high cost of nursing home care which can exceed $100,000 a year in Massachusetts.
Many couples have not had the foresight or are not eligible to purchase long-term care insurance. This leaves most (even those with considerable savings) at risk if they require long-term care in a nursing home. There are steps you can take to protect your spouse and your family's financial security if you understand the Medicaid rules. Below are some aspects of long-term care planning that our firm can help you with.
Spousal Asset Allowance
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 approximately $110,000 of the couples combined assets (excluding the primary residence). The spousal asset allowance is not affected whether the assets are jointly held by the couple, or if they are all held 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 approximately $110,000.
Income under the Medicaid Rules
Although the amount of assets a couple can keep is strictly limited, Medicaid treats income differently. In all circumstances, the income of the community spouse will continue to be undisturbed and he or she will not have to use his or her income to support the spouse receiving Medicaid benefits. In some cases, the community spouse is also entitled to share in all or a portion of the monthly income of the nursing home spouse. Medicaid determines an income floor for the community spouse, known as the Minimum Monthly Maintenance Needs Allowance (MMMNA), which is calculated for each community spouse based on his or her housing and other costs. Where the community spouse can show hardship, MassHealth may award a larger MMMNA, but only after a hearing. If the community spouse's income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse's income.
Most of our clients have assets in excess of the $110,000 Medicaid limit. One means of protecting assets exceeding Medicaid's limits 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 noncountable stream of income for the community spouse. The annuity must be irrevocable and have a term certain (a guaranteed number of years of payment) that is shorter than the life expectancy of the healthy spouse. In addition, the money paid back by the annuity over the life expectancy of the annuitant must be equal to or greater than the amount initially paid for the annuity. The annuity should not be purchased until the spouse enters a nursing home.
Changing Your Will
If your spouse has become ill and you can foresee that they might need nursing home care in the future, it is critical to reexamine your estate plan. For example, many of our clients have wills that leave everything to their spouse. In addition, they typically have powers of attorney and health care proxies naming their spouse as agent.
If your spouse requires nursing home care and obtains Medicaid benefits, it is important to consider the risk that you, as the healthy spouse, could die first. Should this happen, all of your assets would pass to your spouse in the nursing home, placing these assets at risk. Cohen & Oalican, LLP can assist you in revising your estate plan so that regardless of what the future brings, you are protected. Specifically, it may make sense for you to change your will, leaving assets to a specially drafted trust designed so that your spouse can benefit from the assets, without the trust assets affecting ongoing or future Medicaid eligibility. We can also advise you on re-titling your assets so they are protected from your spouse's care costs.
The Medicaid rules are complex and confusing. Cohen & Oalican, LLP can guide you through the Medicaid maze and protect assets for your spouse and your children.
Contact a lawyer at our firm today to set up your initial consultation. Let an attorney at Cohen & Oalican, LLP help you create and implement a plan to protect your family in the event your or your spouse requires expensive nursing home or long-term care.