Many times when clients come to see me, they have in their minds that they need to create an irrevocable trust or give away their assets in order to protect those assets from having to be spent down on their future long-term care costs.  Most of the time, they don’t want to give up control and access to their assets, but they have been inundated by radio advertising and well-meaning friends and family members who tell them they must do this or “they will lose everything to the nursing home.”

The good news is that for married couples who are primarily concerned about being able to take care of themselves and each other (as opposed to being primarily concerned about leaving assets for children or other beneficiaries), Massachusetts law provides some pretty good protections even in cases where no advance planning has been done.

For example, many people believe that if one spouse needs nursing home care, the home must be sold to pay the nursing home.  This is not true.  The community spouse may continue to live in the home; the home does not need to be sold to pay the nursing home bills.

In addition to the home, the community spouse may retain additional assets without affecting the nursing home spouse’s eligibility for long-term care Medicaid benefits.  This is called the Community Spouse Resource Allowance (CSRA) and the amount is adjusted each year.  For 2015, the amount of the CSRA is $119,220.

If the couple’s assets exceed the amount of the CSRA, there is additional planning permissible under the regulations which can allow the spouse in the community to retain assets in excess of the CSRA limit.

There are also protections for the community spouse’s income needs in the event one spouse is in the nursing home.  In general, when a person is receiving Medicaid benefits to pay for long-term care in a nursing home, almost all of the individual’s monthly income must be paid to the nursing home.  For a couple where the wife stayed at home and took care of the children and the husband was the breadwinner for the family, this can pose a real problem if the husband needs nursing home care.   The wife’s Social Security benefit will be quite low and she will be unable to pay her expenses if she does not have her husband’s income.  The Medicaid rules address this situation by allowing the wife to keep the husband’s income up to a certain amount.

While these are valuable protections, it is vitally important that married couples who are concerned about paying for long-term care obtain advice about their particular situation and how the rules will impact them if one of them needs long-term care.  Long-term care planning is unique to every situation.

If protecting assets for children or other beneficiaries is a priority, there is planning that can be taken to protect assets against future long-term care costs.  That planning often means removing assets from the ownership or control of the parents, or severely limiting the parents’ access to those assets.  Further, it is vital to understand that transferring assets to children or to an irrevocable trust will result in a disqualification period during which the parents will not be eligible for Medicaid benefits for which they would have been eligible if they had not made the transfers.  Consequently, the planning necessary to protect assets for children is often not in the best interests of the parents.  As always, it is important to obtain the advice of an experienced elder law attorney who has your best interests in mind before making any decisions about long-term care planning.  Call us to set up a time to learn about your long-term care planning options.

Published March 2015