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Marriage Can Protect Assets From Medicaid

March 7, 2013
By JEFFREY J. ROKISKY - For Boomers & Beyond , The Intelligencer / Wheeling News-Register

Question: I have often heard people say that it is easier to protect the assets of a married couple when one spouse is in the nursing home than when a single person is in the nursing home. Could you please explain?

Answer: The law provides that the community spouse (i.e. the spouse not going into the nursing home) is able to keep half of the married couple's assets up to approximately $110,000. In addition, the assets of the institutionalized spouse (the spouse in the nursing home) and any excess assets of the community spouse can be turned into a stream of income for the community spouse in the form of a Medicaid qualifying annuity. Although the Deficit Reduction Act of 2006 made significant changes to the estate planning techniques used by elder law attorneys, the use of the Medicaid qualifying annuity is still sanctioned under the new law. There are some limitations that did not exist under the old law but it is still a very attractive alternative for a married couple, often resulting in all of their savings being protected.

Question: My parents have consistently made gifts to their children throughout their lifetime. Now my mother is going into the nursing home. Are the gifts that they have given us over the last 10 years going to cause an ineligibility period for Medicaid?

Answer: As a general rule, any transfers for which the person applying for Medicaid has not received fair market value consideration which have occurred in the last five years will cause a disqualification period for Medicaid benefits. Any gifts outside the five-year time period will not pose a problem.

There is an argument that if the gifts have consistently been made as a pattern of gift giving, and have not been done for the purpose of shielding assets from long-term care, that such transfers will not constitute a disqualification period.

The success of this argument will vary state by state and many times county by county. In addition, you will need to be able to produce proof of the consistent gift-giving program by your parents.

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