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DON’T SELL ALL YOUR ASSETS TO PAY FOR NURSING HOME CARE! Asset Preservation Planning Nursing home care can cost over $80,000 per year! This can quickly deplete your life savings. However, with proper planning, you can retain most or all of your assets. Through asset preservation planning, a nursing home resident can retain assets and still qualify for Medicaid. Medicaid is a government program that pays the cost of nursing home care. Medicaid may be the only alternative for paying for nursing home costs without becoming destitute. As an attorney who has been practicing Asset Preservation Planning for nearly a decade, I have saved clients hundreds of thousands of dollars. I have the expertise to be able to save all or a large portion of your assets! Generally, a Michigan resident who is age 65 or older, or disabled, may qualify for Medicaid if the financial criteria for asset and income limitations are met. The asset limit is $2,000 for an individual. Assets taken into account for the asset limitations are called countable assets. Only the assets of an adult and his or her spouse are counted. Examples of countable assets include: cash, stocks, bonds, land, IRAs and pension plans. Basically, anything that is not exempt is a countable asset. Examples of exempt assets include: a homestead and adjoining land*, household furniture and one vehicle*. This means that a person could have $2,000 in cash, a home* and furnishings, a car*, and still qualify for Medicaid. If a person has more than $2,000 in countable assets, then the excess money/assets must be spent down to the $2,000 limit. For example: Maxine, a single woman, owns a home, a car and has $80,000 in savings. The home* and the car* are not counted as assets. The $80,000 is a countable asset and must be spent down (this is called the “spend-down”) to $2,000. Usually, this is done by paying for nursing home care. Nursing home care can cost as much as $6,500 per month; so it does not take long to deplete Maxine’s life savings. Through proper Asset Preservation Planning, there are legal options available for the family to retain a portion of Maxine’s “spend-down” ($78,000) and still qualify her for Medicaid to pay for her nursing home care. The family will then have additional funds to help out Maxine if she comes out of the nursing home at a later date, or buy her clothes while she’s in the nursing home, etc. This money can also be used to pay the taxes and insurance on Maxine’s home while she is in the nursing home. For married couples, the asset and income limitations are different when one spouse goes into a nursing home. The spouse that stays home, called the community spouse, is allowed to keep certain assets in order to support himself or herself. Generally, this amounts to one-half of the couple’s countable assets with the minimum that the community spouse can keep being $20,880 and the maximum being $104,400. The nursing home spouse is still only allowed to keep a maximum of $2000 in countable assets. The couple must spend down the excess money before they can qualify for Medicaid. For example; John and Linda own a home, a car and have $100,000 in savings. John has to go into a nursing home. The home and the car are not counted as assets. The $100,000 is a countable asset and Linda (the community spouse) is allowed to keep one-half: $50,000. John is only allowed to keep $2,000, so the total amount the couple can keep is $52,000. Therefore they have to spend $48,000 (the “spend-down”) before the John can qualify for Medicaid. Once again, this is usually done by paying for nursing home care. Nursing home care can cost as much as $6,500 per month; so it does not take long to deplete their life savings. Through proper Asset Preservation Planning, there are legal options available for the Linda and/or the family to retain a portion of the “spend-down” and still qualify John for Medicaid to pay for his nursing home care. This money can be used to help support Linda while John is in the nursing home. Any person who disposes of assets for less than fair market value for the purpose of qualifying for Medicaid has made a divestment. A common situation is giving assets away to family members, such as transferring money or signing off property. There is a penalty for divesting assets within 60 months of applying for Medicaid. As you can see, Asset Preservation Planning can be quite advantageous if done properly and quite detrimental if not. Through Asset Preservation Planning, the law provides options for you and your family to retain assets and still qualify for Medicaid to pay for nursing home care. You can have peace of mind that you are not destitute. Contact Walling & Foster, P.C. to speak with an understanding and qualified attorney for a free consultation. Based on requirements for the State of Michigan in the year 2008. This information is only a brief overview and is not intended to be legal advice.
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