The Medicaid rules governing eligibility for nursing home coverage are entirely different from marital property rules. A community spouse (well spouse) can keep their house. It does not have to be part of the institutionalized spouse’s Medicaid spend down. Other assets like life insurance, other valuable property, and proceeds from previous home sales, however, would have to be spent down to approximately $150,000. IRAs may or may not be excluded – every state has different views on that issue.
Getting Local Professional Advice
We strongly recommend consulting with an elder law attorney in your state due to differing laws in how the Medicaid rules are applied and the strategies available to protect funds over the $150,000 asset limit.
Asset Protection Strategies
Protecting other money or property from being spent on long-term health care requires legal strategies such as a Medicaid asset protection trust. When significant financial resources are owned by a trust instead of an individual, they are no longer countable toward Medicaid benefits. There are complex rules for using this strategy. Again, every state has different rules.
Contact an estate planning or elder law attorney in your area.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.