There are those who discuss estate planning as though it was simply a matter of positioning unlimited assets in an optimal manner so that you are prepared to address all of the eventualities of aging. If you do have this type of financial freedom that is fantastic, but the reality is that very few people have access to that mythical “blank check” that they can pull out as many times as may be necessary. So for the vast majority of people, careful planning is necessary because the expenses that you are likely to face after your working years are over are considerable to say the least.
Are you aware of just how costly long term care is these days? In 2010 it cost an average of $83,500 to spend a year in a nursing home in the United States. And contrary to what many people believe, Medicare does not cover long-term care expenses.
The good news is that Medicaid will cover it, and if your spouse has to go into a nursing home you can retain half of the assets that you own as a couple with a high-end limit as of this writing of $109,560. The laws differ somewhat state-by-state, but the minimum amount the healthy spouse can keep without impacting the Medicaid eligibility of his or her spouse is $21,912. So if your total assets were, for example, $30,000, the healthy spouse would be allowed to retain at least $21,912 rather than half of $30,000. (It should be mentioned that some states actually have a higher minimum.)
It is important to recognize the fact that the above parameters are only applicable to the “countable” assets. Things like your home (up to $500,000 in equity), one vehicle, and your personal property are not counted against you when you file for Medicaid.
The healthy or community spouse may also retain all of his or her personal income without having to contribute to the long-term care expenses of the institutionalized spouse.
If you are interested in learning more about how best to position yourself with Medicaid eligibility in mind, simply arrange for a consultation with an experienced elder law attorney.