Elder law attorneys help clients prepare for future Medicaid eligibility. Why is this important when you know you will qualify for Medicare as a senior citizen?
The majority of seniors will require long-term care of some kind, and over 30 percent will need nursing home care per se. As you would imagine, these facilities are quite expensive, and Medicare does not pay for the custodial care that you would receive in a nursing home.
Medicaid will pick up the tab if you can gain eligibility, and this is why many solvent seniors seek Medicaid coverage late in their lives.
What About the Healthy Spouse?
You cannot qualify for Medicaid if you have more than $2,000 in countable assets in your name, and property that you own with your spouse is countable. The healthy spouse is going to need resources and income, and fortunately, this has been acknowledged by lawmakers.
Medicaid Community Spouse Allowances
If you are going to be living independently when your spouse enters a nursing home, you can receive a Community Spouse Resource Allowance, which is half of the countable assets. That’s the good news, but the bad news is that there is a limit that stands at $148,620 in New Jersey in 2023. There is a minimum threshold as well, and it stands at $29,724 this year.
There is also a Monthly Maintenance Needs Allowance. This gives the community spouse the ability to keep income that is due to the institutionalized spouse if it is needed. The maximum allowance in New Jersey is $3715.50 for the rest of this year. On the other side of the scale, the minimum monthly maintenance needs allowance is $2,465.
These figures are indexed for inflation annually, and there has been more inflation over recent years. As a result, these numbers will be a bit higher in 2027.
Other Medicaid Facts and Figures
A home is not a countable asset for Medicaid eligibility purposes, but there is a $1.033 million equity limit this year. If a healthy spouse is still living in the home while their spouse is moving into a nursing facility, there is no equity limit.
Your wedding and engagement rings are not counted, and heirloom jewelry would also fall into this category. The items around your house that you cannot sell for any meaningful return are not counted, and your personal effects are exempt.
An applicant can gain eligibility if they own a motor vehicle, and prepaid burial plots are not countable assets. Up to $1,500 that is saved for final expenses is allowed along with the same amount of whole life insurance and unlimited term life insurance.
Medicaid Estate Recovery
Medicaid is required by law to seek repayment from the estates of beneficiaries after they pass away. Since you cannot qualify with anything of value in your possession except your home, this is usually the only thing that would potentially be in play.
A lien would be placed on your home if you pass away as a Medicaid beneficiary and you are in direct possession of residential property, but there are a couple of exceptions. If a blind or disabled adult child or a minor is living in the home, it would be protected.
There is also a caregiver-child exemption. You can transfer ownership of your home to a child that has been living with you to provide a level of care that has allowed you to stay out of a nursing home for at least two years.
Five-Year Look-Back Period
You can protect your home by conveying it into an irrevocable Medicaid trust, and you can also transfer income-producing assets that would be countable into the trust. The principal would no longer be available to you, but you could accept distributions of the trust’s earnings.
There is a five-year look-back period, so you have to fund the trust at least 60 months before you apply. If you comply with this rule and seek eligibility for Medicaid after the waiting period has expired, the principal would not count.
Take Action Today!
If you take the right steps in advance, you can enjoy your golden years secure in the knowledge that your nursing home costs will be covered. We can gain an understanding of your position, make recommendations, and help you implement a plan that covers all your bases.
You can schedule a consultation at our Warren, NJ elder care planning office if you call us at 908-222-8803, you can alternately use our contact form to send us a message.
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