Like many people, you may find that you need to qualify for Medicaid benefits during your “Golden Years” because of the high cost of long-term care. Because Medicaid eligibility is based, to a large extent, on your income and assets you may be forced to “spend-down” those assets before Medicaid will find you eligible for benefits. Where does that leave your spouse though? At this point you should be asking the question “How can I protect my spouse when I apply for Medicaid?”
The best time to worry about protecting your spouse, as well as your assets, is long before you actually need to qualify for Medicaid. Ideally, Medicaid planning should be done years before you anticipate the need to qualify for benefits. The reason for this is that when Medicaid reviews an application they use a five year “look-back” period. In essence, this means that Medicaid will look into your finances for the five year period prior to the date of your application for benefits and any asset transfers that occurred during that time frame will be disregarded and the value of the asset imputed back into your estate. If the value of your “countable resources” (assets) at the time of your application exceeds the program limit, you will be forced to “spend-down” your assets before Medicaid will start helping with the costs of long-term care. This, in turn, can greatly diminish the value of your estate – an estate that you likely worked hard all your life to amass. Moreover, if you are forced to use estate assets to cover long-term care expenses that means those assets are no longer available for your spouse’s use.
The good news is that if you include Medicaid planning in your overall estate plan early on in life you can protect your assets, your spouse, and still ensure that you will qualify for Medicaid when the time comes. Even if you failed to plan early on you may still be able to employ some perfectly legal Medicaid planning strategies prior to applying for Medicaid that can protect some of your assets. Finally, the Medicaid “spousal impoverishment” rules can also be used to help protect your community spouse from being left with no resources. The spousal impoverishment rules allow your spouse to keep some income and assets for his/her use while you are in long-term care. The amount a community spouse is allowed to keep will depend on a variety of factors.
If you have additional questions or concerns about Medicaid planning or estate planning in general, contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.