Dear Mr. Azrael:
We are a couple in our 70s - both have adult children from previous marriages.
To safeguard "their inheritance" we have kept our money separate. My husband owns the home we live in. We often consider downsizing - either to a condo (which he would own) or an apartment (investing the money from the sale of this house).
We've heard owning a home protects that investment in the event he would have to go to a nursing home.
Since my name would not be on this home (or condo), would I be allowed to remain in the home in the event he'd have to "spend down"?
Mrs. C. E. Lynch
Dear Mrs. Lynch:
State Medicaid (medical assistance) will pay for basic nursing home and medical care for people who meet the eligibility, including requirements as to both assets and income. In determining eligibility for medical assistance, the assets of both spouses are considered regardless of how the assets are titled or owned.
The value of a home owned by a married Medicaid recipient or his spouse, is excluded from assets for the purpose of Medicaid eligibility.
Therefore, if a couple makes an informed decision to "spend down" assets, it may be quite appropriate to purchase a new home or condo or spend money to improve the home in which one lives.
The non-nursing home spouse can continue to live in the home without affecting the other spouse's Medicaid eligibility.
If a Medicaid recipient is single or widowed, the state places a lien on the recipient's home for the amount of medical assistance the state pays during the recipient's eligibility.
The lien must be repaid when the home is sold by the recipient or his estate.
Thus, if your husband qualifies for Medicaid, he must take steps to properly retitle the house and other assets so that money or property will not pass to your husband if you should predecease him.
Whether a spend-down program makes sense for you and your husband is a complex question, which depends on your sources of income, the kinds of assets you own, their values and your willingness to reduce your holdings to comply with medical-assistance regulations. For many folks, medical assistance is not a viable option.
There may be better alternatives, including long-term care insurance. The laws and regulations continually change, so today's rules may not apply if and when you or your husband need Medicaid.
I strongly suggest that you and your husband consult with an attorney experienced in elder law.
The lawyer can review your financial situation and help you design an estate plan to best protect your assets in the event one or both of you needs nursing home care.