nj.com’s recent article, “Married and protecting assets from Medicaid,” explains that when a single person applies for Medicaid, he or she must have no more than $2,000 in assets to meet Medicaid's eligibility requirements. However, the rules for married couples are different.
Medicaid deems the married couple to be one unit. Therefore, it doesn’t matter which spouse owns the assets. If you need Medicaid, you can’t just transfer your assets to your spouse in order to qualify. There are certain assets that are exempt from Medicaid rules. These include the primary home (if at least one of the spouses lives in it), a car and term life insurance that doesn't have cash value. The healthy spouse can keep those. Anything else is countable.
Medicaid totals the countable assets and divides them in half. The healthy spouse (called “the community spouse”) gets to keep one half of those assets, but only up to a maximum of just under $121,000. Everything else must be spent down to become Medicaid eligible.
But what if I divorce my spouse and keep all the assets? Provided there’s a valid prenuptial agreement in place that establishes what you can keep, this may be a solution. However, if you just want to shift all the assets to the community spouse by a divorce, the state probably will challenge that when it comes time to apply for Medicaid.
Remember, there’s also a five-year look back rule, if you transfer assets that are gifts and not purchases or other legitimate expenses. These transfers don’t stop a person from applying and receiving Medicaid benefits. However, the transfers penalize the recipient by delaying the amount of time until he or she can be eligible for benefits.
Speak with an experienced elder law attorney who knows how to file Medicaid applications and understands the Medicaid laws and regulations. Your elder law attorney can help you find better strategies to protect assets for the community spouse.
Reference: nj.com (December 13, 2017) “Married and protecting assets from Medicaid”
If you would like more information, give our office a call for a FREE consultation 801.438.7120!