Medicaid Planning For Married Couples
Attorney James J. Ruggiero, Jr.
Ruggiero Law Offices, LLC
Paoli, Pennsylvania 19301
An ElderCare Matters Partner
Sometimes married couples find themselves in a position where one spouse is in need of skilled care and the other spouse is still well and plans to continue to reside in the family home. Under these circumstances, it is common for the couple to make a series of transfers to move assets out of the ill spouse’s names and into the name of the community spouse (with the assistance of an elder law attorney) for the purposes of qualifying for Medicaid. In order to remain Medicaid-qualified, the ill spouse must continue to keep an extremely small number of assets in his or her own name. An issue can arise when the well spouse fails to update his or her estate plan; if everything is left to the ill spouse, and the well spouse predeceases him or her, all of those assets that were transferred will go back into the name of the ill spouse and they will no longer qualify for Medicaid benefits. Working with a skilled elder law attorney is essential when a spouse needs skilled care; transfers must be made properly within the bounds of the complex and lengthy set of Medicaid rules.
What most people know is that Medicaid is a “needs-based” program, and in order to qualify, an individual must have very few assets in his or her own name (usually no more than $2,400.00). What people may not know is that for married couples, the well spouse who will continue to live in the community also faces a limitation on the assets he or she may have in his or her own name. This amount is known as the “Community Spouse Resource Allowance” (CSRA). In general, the community spouse can keep one-half of the couple’s total assets that are countable for Medicaid purposes, with a minimum of $23,448.00 and up to a maximum of $117,240.00 (for 2014). The community spouse is also entitled to keep a certain level of income, the Monthly Maintenance Needs Allowance (MMNA), which also has a floor and a ceiling. The community spouse is also afforded the ability to keep certain resources that would otherwise be considered “countable” if they were in the Medicaid applicant spouse’s name.
The CSRA and the MMNA are at the base of Medicaid planning for married couples. However, we routinely not only help families keep the family home, qualify for Medicaid, and ensure that Medicaid qualified individuals remain qualified regardless of any change in circumstance; but through the use of planning techniques and transfers all permitted under Federal and state Medicaid rules, we can potentially help the community spouse protect resources beyond the Community Spouse Resource Allowance.
For instance, Medicaid annuities offer one planning option for spouses whose resources exceed the CSRA. The use of a Medicaid qualified annuity can permit the community spouse’s resources to be reduced, while still permitting that spouse to make use of those assets for his or her benefit by turning the assets into a stream of income. As with all Medicaid planning, it is extremely important to get legal advice from a knowledgeable elder law attorney before engaging in any kind of Medicaid planning, including the purchase of an annuity. To be considered a “Medicaid qualified” annuity, the annuity must follow certain rules, otherwise the individual may be disqualified from receiving Medicaid benefits. And all transfers must be done within the boundaries of the intricate Federal and state scheme of rules and regulations governing Medicaid eligibility.
Having a loved one in need of skilled care is a challenging experience for any family. The thought of a spouse or family member entering a nursing home can bring worry and anxiety; and these emotions are sometimes compounded with the worry of how the family will afford the necessary care. There are certain protections under the Medicaid laws that will allow spouses the ability to keep some assets for their own benefit and living expenses while a spouse is receiving Medicaid payment for his or her skilled care needs. Consulting with an experienced elder law can bring comfort and piece of mind throughout a difficult process, and afford the family the ability to conserve as many assets as possible. Taking the time and expending the costs to plan now will pay off in spades later on. Although it may seem difficult to take action in these circumstances, we can’t stress enough that the earlier the planning begins, the more beneficial it will be.
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