Spousal Protections and Long-Term Care: What You Need to Know

Attorneys Greg McIntyre and Brenton Begley

When one spouse needs long-term care, many families fear the worst: “We’re going to lose everything.”

The good news? That’s not necessarily true.

There are powerful spousal protections built into long-term care Medicaid rules that can help preserve income, assets, and financial stability for the healthy spouse—often called the community spouse. But understanding and using these protections correctly is key.

Why Powers of Attorney are Essential

One of the most common (and costly) misconceptions is that being married automatically gives you full authority to act on your spouse’s behalf.

It doesn’t.

To properly plan for long-term care and qualify for benefits, two documents are critical:

General Durable Power of Attorney
Healthcare Power of Attorney

These legal tools allow a spouse to:

Access and manage financial accounts
Sign contracts for care facilities
Make healthcare decisions
Coordinate and complete Medicaid applications

Without these in place, even a spouse may be blocked from accessing key assets like:

Retirement accounts (IRAs, 401(k)s)
Life insurance policies
Certain financial accounts
Real estate transactions

In many cases, families only discover this limitation during a crisis—when time and options are limited.

Income Protection for the Healthy Spouse

Another major concern is income:
What happens when one spouse enters a nursing home?

Under long-term care Medicaid rules, most of the applicant spouse’s income typically goes toward the cost of care. However, protections exist to ensure the healthy spouse is not left without sufficient monthly income.

This is where the Minimum Monthly Maintenance Needs Allowance (MMMNA) comes into play.

How It Works:

If the healthy spouse has lower income, they may be entitled to a portion of the institutionalized spouse’s income
This income can be legally diverted to support household expenses
There is a monthly cap (approximately $3,500, though this can change annually)

Example:

Healthy spouse income: $1,000/month
Applicant spouse income: $5,000/month

A portion of the applicant spouse’s income can be shifted so the healthy spouse reaches the allowed monthly threshold—helping cover everyday living expenses.

This protection is critical for maintaining financial stability at home.

Asset Protections: What Can the Healthy Spouse Keep?

Beyond income, many families worry about losing savings, investments, and property.

Medicaid rules do allow the healthy spouse to retain a significant portion of the couple’s assets through what’s known as the:

Community Spouse Resource Allowance (CSRA)

Typically allows the healthy spouse to keep around $160,000 in assets (amount may adjust annually)

But what happens to assets above that amount?

This is where experienced legal guidance becomes essential.

Strategic Planning Within Medicaid Rules

Even within the Medicaid “look-back period,” there are legal strategies that can:

Protect additional assets
Reposition resources
Preserve real estate
Help the applicant spouse qualify for benefits faster

These strategies can involve:

Asset reallocation
Income shifting
Strategic spend-down planning
Protection of the family home

While these techniques can be complex behind the scenes, they can be implemented in a clear, structured way when guided by an experienced elder law attorney.