How to Protect Assets if Spouse Goes into Nursing Home

  • By: Promise
  • Time to read: 6 min.
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Taking care of elderly ones can be time-consuming especially when you work during weekdays. However, it is more emotional when your spouse is in the nursing home. Not that you aren’t a good spouse, you just don’t have the time to really stay with them.

Many people resort to a nursing home when it comes to their old relatives or a sick spouse. A private nursing home can be very expensive because you’ll have to pay for the treatments they will get. But Medicaid also provides nursing home care for elderly ones. They pay your spouse’s bills for the nursing home while you maintain the home he/she left behind.

Nonetheless, when it comes to Medicaid, people are always scared that Medicaid will take their assets during the estate recovery process when the applicants die. They feel they weren’t informed but the truth is the process was listed in the documents.

How to protect assets if spouse goes into nursing home are by:

  • Spending down the money by paying off mortgage and loans.
  • For your countable assets, transfer his/her money to trust. 
  • Renovating your house
  • Repairing your car.
  • Paying for your funeral fees.
  • Turning all your countable assets into uncountable assets is also another strategy.

What is a Nursing Home?

A nursing home is a home for elderly or disabled people who needs 24-hour care. It can be part of a hospital or it can be a separate facility. Medical personnel, therapists, and other medical practitioners are always available there.

In the nursing home, people are helped with bathing, dressing, eating, and other activities they can’t carry out. Also, the staff has a close relationship with the residents. A nursing home is different from other senior housing.

Qualifications for a Nursing Home

The nursing home is not just for elderly ones. It is for disabled people that need 24-hour care.

  • To qualify for a nursing home, you need to be medically needy.
  • A physician must write that the patient needs care from a nursing home.

Also, there are different nursing homes that have their qualifications and how to apply for them. There are private nursing homes where you pay for all the services. Your spouse can also apply for Medicare.

Medicare does not offer long-term care for the applicant. However, if you need long-term care from Medicaid, a nursing home must be affiliated with that Medicaid before they can offer that.

Medicaid requirements differ from state to state but there are general requirements like the person must need 24-hour care. Also, there are financial requirements the applicant must meet. If one of a couple will be applying for Medicaid, the assets of the couple will be jointly accessed.

To qualify for Medicaid nursing home, you have to meet the income rate of that state. States like Alaska and California use this approach to measure eligibility status. In other states like Nebraska and Nevada, your income can be higher than the income limit but it’s not up to the expenses of the nursing home.

What Happens When My Spouse Enters into a Nursing Home?

When your spouse enters into a nursing home, his needs would be catered for. Medicaid takes up all the healthcare costs. He will lose his/her income. The only money he will be having is his personal allowance which is determined by the state and your joint allowance is also considered.

Since it’s your spouse that is in the nursing home, your joint allowance is put into consideration. But this is dependent on the Minimum Maintenance Needs Allowance.

If the community spouse (the spouse at home) is not earning up to the MMNA, then the income of the institutionalized spouse will be added to that of the community spouse.

Medicaid also add up the assets of both spouse and the state Medicaid agency determine how much of the combined assets that the community spouse will take.

Can Nursing Home Take Spouse Assets?

When the spouse gets approved by Medicaid to enjoy its nursing home coverage, the patient will be accepted. For anyone applying for Medicaid, there are two kinds of assets: countable and uncountable assets.

Countable assets include cash, stocks, and bonds. The uncountable assets include the house of the patient, car, jewelry, household items.

Medicaid is only concerned about countable assets. The uncountable assets are not taken by Medicaid. So the nursing home will not take the spouse’s assets. The community spouse stays in the house to maintain the house.

But there’s a process called the Medicaid Assistance Estate Recovery which takes effect after a patient’s death.

Medicaid recovers all it has spent on the healthcare cost of the patient while he/she was alive. Here the uncountable assets will be taken to pay the cost. To avoid this, a Medicaid practitioner will be able to help from the beginning of the process.

How to Protect Assets if Spouse Goes into Nursing Home?

To protect your assets if spouse goes into a nursing home;

  • Spend down the money by paying off mortgage and loans.
  • For your countable assets, you can transfer his/her money to trust.
  • You can renovate your house or repair your car.
  • You can also pay for your funeral fees.
  • Turning all your countable assets into uncountable assets is also another strategy.
  • For uncountable assets, look through the documents and don’t sign anything that can cause you to fall under Medicaid Assistance Estate Recovery.
  • Set up a Life Estate. This means two persons will have joint ownership of the house. The institutionalized spouse will be the owner till his/her death while the community spouse will take over after the death of the applicant.

When it comes to laws regarding nursing homes, you need to have an elder law attorney who will guide you through the process. The process itself is emotional so there are some things you might miss out things. The attorney will be there to help out.

They know different strategies to take to protect your assets from being taken when your spouse dies. And if you just want to gather information before you have an attorney, you are on the right page.

What Assets Are Protected from Nursing Home?

You can protect both countable and uncountable assets from a nursing home. With the help of a Medicaid expert, you will be guided through the process. You can protect your money by investing in Trust or turning it into your irrevocable funeral trust.

You can also protect your residential home, household items, and car from being taken by Medicaid after the institutionalized spouse dies. With the right guidance, all your assets can be protected from the nursing home.

This information should clarify those that are asking whether buying a car can affect Medicaid or can you buy a house while on Medicaid. It’s better to read these articles to be on the safe side. You should be informed to avoid making mistakes.

How Can I Hide My Money from a Nursing Home?

You can’t hide money from the nursing home. You can’t even transfer all to your kids less than five years ago. But there are ways you can protect your money.

  1. Trust: You can set up a living trust. All your finances and resources will be in the name of the trustee. Medicaid won’t disturb you for the money with your trustee.
  2. Annuity: You can set up an annuity. Although some states don’t accept that. You convert your money into uncountable assets.
  3. Spend Down Your Money: Spend down your money wisely and start as soon as possible so that you can be able to apply for Medicaid in six years’ time. You can’t transfer up to $15,000 at once to a person during the look-back period. So you have to be strategic and carry your attorney along.

Final Thoughts

There’s a lot that goes on with having a spouse in the nursing home. Emotions like guilt and frustration will be prominent. But you shouldn’t allow it to push you to make some costly mistakes that will make your spouse ineligible for the nursing home or make you homeless after your spouse pass on.

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