When you are planning for the latter portion of your life there are two things that you should keep in the forefront of your thinking. For one, it is likely that you will someday need long-term care if you do live to the age of 65. And secondly, contrary to the beliefs of some people Medicare does not pay for long-term care expenses.
The federal program that will pay for long-term care is Medicaid. However, this program is intended to be a safety net for people who have little to no financial resources. As a result, there is an upper resource limit that you cannot exceed if you want to be eligible for Medicaid coverage.
This limit is so low that a lot of people immediately toss out this option, but you have to understand the details. The Medicaid upper resource limit is $1,600.00, but not all of your assets are considered to be countable in a Medicaid eligibility context.
If you are married and you need long-term care but your spouse does not he or she can keep his or her half of the community assets without negatively impacting your ability to qualify for Medicaid. There is a limit to this however, and it has been raised for 2012. In 2011 the healthy or community spouse could keep $109,560 but that has been raised to $113,640 this year.
Medicaid rules are rather complex, so it takes some intelligent and informed planning to become eligible while retaining a significant store of assets. To learn the details, the wise course of action is to sit down and discuss the matter with a Hartford elder law attorney.