When planning Medicaid eligibility for someone who may need a nursing home stay, the focus is typically on making the spouse who needs care eligible for Medicaid nursing home coverage through shifting assets to the spouse who does not need nursing home care. In this scenario the spouse who does not need care is referred to as the community spouse. After the spouse no longer needs nursing home care, the couple’s assets remain in the name of the community spouse instead of being recovered by the state Medicaid agency.
Please keep in mind that real life Medicaid planning should only take place while working with an experienced elder law attorney. The elder law attorney will make sure that a couple only takes the necessary steps to ensure Medicaid eligibility and that all eligibility planning conforms with the state’s Medicaid regulations. This planning will make sure that the couple avoids unnecessary expenses while ensuring that a couple’s Medicaid planning will achieve the intended result in the most cost effective manner possible.
However, things do not always go according to plan. One scenario that couples should plan for is the possibility of the community spouse dying before the spouse who needs nursing home care. In a typical basic estate plan where each spouse leaves everything to the other spouse, the death of the other spouse can cause significant financial problems for a spouse receiving Medicaid nursing home coverage. They may temporarily lose Medicaid coverage and have to pay for nursing home care from their remaining life savings until they regain Medicaid eligibility. Additionally, the couple’s home can become vulnerable to recovery from the state Medicaid agency once the remaining spouse dies. This scenario can leave a couple’s beneficiaries with little or nothing left to inherit.
To protect against this scenario, couples planning for one spouse to potentially receive Medicaid nursing home coverage should work with an experienced, local elder law attorney to develop a plan that protects both the community spouse’s assets while still minimizing disruptions to the other spouse’s Medicaid coverage. One potential way to do this would be for the community spouse’s assets to go to a trust for the couple’s beneficiaries instead of the spouse receiving nursing home care. An elder law attorney will work with a couple to determine what is the best course of action for each couple’s particular circumstances.
When attempting to plan for this possibility, it is important to work with a local elder law attorney because Medicaid regulations and implementations can vary significantly from state to state. In Missouri, for example, the state’s Medicaid program is known as MO HealthNet. Additional complications to these plans can come from state laws regarding spousal inheritance and ways the state Medicaid agency can force recovery.
For help in protecting your estate plan from a potential nursing home stay, please call Martha C. Brown & Associates at (314) 962-0186.