Preserving Assets and Income for the Spouse Living at Home
People often think that when their spouse is admitted to a nursing home that it will necessarily lead to financial ruin for the family. This is not true, because the law provides that the spouse living at home can retain significant family assets and income. The Medicaid authorities refer to the spouse living at home as the Community Spouse. The spouse residing in the nursing home is referred to as the Institutionalized Spouse.
Exempt Assets for the Community Spouse
Medicaid rules allow the Community Spouse to retain the following assets as exempt resources:
— $74,820 to $119,220 in monetary assets
— the family home
— all the tangible personal property within the family home
— irrevocable pre-paid funeral arrangements
— one car
The $74,820 to $119,220 in monetary assets is referred to as the Community Spouse Resource Allowance (CSRA). The $74,820 figure is a “floor” and the $119,220 figure is a “ceiling.” The actual CSRA amount for the Community Spouse will be within that range and determined by the overall nonexempt assets of the family.
If a couple has monetary assets in excess of the CSRA, Medicaid will require those funds to be spent on nursing home costs in order to reduce their assets to the CSRA – this process is referred to as a spend down. If that couple owns a home, however, an acceptable alternative is to spend the money on necessary home repairs because the home is an exempt asset. For example, $5,000 in funds in excess of the CSRA can be used to pay for a needed furnace replacement, instead of being spent down on nursing home costs.
Exempt tangible personal property includes all the furniture and furnishings in your home, i.e. tables, chairs, beds, jewelry, books, electronics, etc. The only exception to the exemption would be items of special intrinsic value, like a collectible coin collection or valuable pieces of art.
Irrevocable funeral arrangements are also exempt, as is one car for the Community Spouse to use in the course of usual household activities.
Exempt Income for the Community Spouse
The Community Spouse is also entitled to $2,980.50 per month in income, which is known as the Minimum Monthly Maintenance Needs Allowance (MMMNA). If the Community Spouse does not have that amount in their own name, they are entitled to income from the Institutionalized Spouse to reach the $2,980.50 level.
For example, if the Community Spouse receives $1,500 in Social Security and the Institutionalized Spouse receives $2,000 in Social Security, the Community Spouse is entitled to $1,480.50 of the Institutionalized Spouse’s $2,000 in Social Security in order to reach the $2,980.50 MMMNA level.
Planning Opportunities
If your spouse is entering a nursing home and applying for Medicaid, you do not need to be impoverished as a result. The rules regarding income and asset exemptions are complex, but they yield many planning opportunities to maximize the preservation of assets and income for the Community Spouse.
To learn more, you should contact an experienced elder law attorney in your area and discover what planning opportunities are available for your family.
Matthew J. Dorsey, Esq. is of Counsel to O’Connell and Aronowitz, 1 Court Street, Saratoga Springs, NY. Over his eighteen years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at 584-5205 and This email address is being protected from spambots. You need JavaScript enabled to view it..
