When clients come to McIntyre Elder Law because one spouse is in need of Medicaid Crisis Planning, the focus is on the spouse in immediate need for nursing home care. With the average cost of nursing home care rising to $10,000+ per month, it makes sense that the “healthy spouse”, known as the community spouse, wants to take every step necessary to qualify their spouse for Medicaid. Oftentimes they set their own financial goals and planning needs aside. For the community spouse, what comes after crisis planning is just as important as the crisis planning was for the spouse in need.
During the Medicaid qualification and application period, both spouses are looked at as a unit for eligibility purposes. The spouse that is applying must be individually eligible, but the community spouse must also qualify financially to obtain Medicaid benefits for the spouse in need. The community spouse is allotted a certain amount of assets they can keep, which is known as the community spouse resource allowance. The community spouse must stay within the allowance up until the spouse that is applying has been approved for Medicaid. There are many planning options available to do just that.
Once approved for Medicaid, Medicaid foots the majority of the nursing home bill, but not all, and it can leave the community spouse short of the normal household income they are used to. It is vital that we consider the financial needs and future benefit eligibility of the community spouse during the crisis planning, but also afterward, as an extension to the planning.
The good news is, once the spouse applying for Medicaid benefits has been approved and is able to maintain individual eligibility, the community spouse is no longer subject to the community spouse resource allowance. This opens the door for a multitude of planning options and opportunities for the community spouse, which merits a holistic approach from a team of expert professions in the areas of estate planning and financial planning.
This is an opportunity for the community spouse to take the spotlight and focus on their financial health and plan for their own long-term care. The crisis planning may have repositioned some of the assets and tax qualified funds may have been converted to non-qualified funds. In some cases, this can be an ideal time to establish a Medicaid Asset Protection Trust for the community spouse to invest, or re-invest, in the name of the trust, where those investments are protected and made non-countable for Medicaid after 5 years. There are numerous other planning strategies that can be tailored to your individual situation. This is where McIntyre Elder Law and our financial planning affiliates can sit down together at the same table with you and craft a holistic plan that encompasses all aspects of your estate plan and financial wellbeing.
This holistic approach to is not exclusive to community spouses and should be considered by all individuals that aim to secure their future and prepare for their imminent long-term care needs.
Mary Kales
Benefits Director
