Don’t be mistaken, this information is just as important, if not more important for those who are young and have time to make smart choices to prepare for later years.
This is Part Two regarding The Spousal Impoverishment Protection Law. Please refer to Part One for more background information.
From the (SHIIP) Senior Health Insurance Information Program Brochure put out by Nebraska Dept of Insurance:
Under the Spousal Impoverishment Protection Law, the spouse who remains at home retains his/her personal income. This includes Social Security, pensions, interests, dividends, etc.
The spouse in the nursing home will be required to use his/her income to pay for his/her care, except for a personal allowance of $50 per month ($90 per month for veterans).
After the income has been split, if the spouse at home gets less than $2,114 every month, he/she may keep part of the nursing home spouse’s income, giving the spouse at home at least a monthly income of $2,114. (keep in mind this extra from the spouse would only last as long as that spouse is still living and receiving an income)
If the spouse at home has to pay high rent, mortgage or utilities, he/she may be able to keep more of the nursing home spouses income.
Most assets (such as bank accounts, stocks, bonds, etc.) are considered as joint assets between a husband and a wife under the spousal impoverishment Protection Law. It does not matter in whose name they are placed.
The spouse at home is entitled to keep at least half of all countable assets, within the following guidelines:
Minimum: at least $25,284 in 2019 Maximum: up to $126,420 in 2019
Other things to know:
Most of us hope to be able to live off our savings and retirement income in our later years and when we die, we want what is left to go to our spouses and/or children. I don’t know anyone who wants all their money and assets to go towards long term care, leaving the remaining spouse with little to live on and/or use for care they may need. However, this is a reality that many people are living! Just talk to any social worker in a long term care facility and they could tell you sad stories all day long.
You’ve probably heard of people moving money to their kids names, giving assets to family members, etc. That seems like it could be a reasonable way to preserve assets. However, caution must be exercised and legal/professional advisement would be wise.
Medicaid is available to people who qualify for it and one of the keys to qualifying is that the person doesn’t have adequate resources and assets to pay for their own care. Medicaid is very aware that people want to preserve their assets for their family rather than spend it down on their care.
Therefore, there is what is referred to as the 5 year look back. Medicaid requires an immense amount of paperwork in order to qualify for Medicaid funded long term care. They will go over everything with a fine tooth comb. If they see transfers of money or assets, they will pursue that and it is very possible the money, assets or value of the assets will have to be returned and used towards care until it is exhausted; delaying qualification for Medicaid and quite possibly putting family members in a precarious position.
There is more to this subject, including the requirements and limitations for spousal retention of homes and vehicles. Hopefully you’ve read enough to know that there are some reasons for serious concern and attention when it comes to the financial situation of a spouse of someone receiving Medicaid covered long term care.
There are things you can do to help protect yourself and/or your spouse. Please give me a call to discuss the options as well as get a referral to an attorney that specializes in helping people prepare and retain assets and income for their later years. Lisa Kennedy 402-686-0230
Links to resources used in this post:
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