Long-term care costs can potentially consume a significant portion of the legacy that you will be passing along to your loved ones. Why is this the case if you qualify for Medicare coverage? Many people would say it isn’t fair, but Medicare does not cover the custodial care that nursing homes provide.
Medicaid will cover these costs if you can gain eligibility. We are going to look at the updated figures for the Medicaid spousal allowances in this post. But first, we will provide some broader background information to provide context.
Medicaid Eligibility Parameters
Here in Connecticut where we practice, the asset limit for Medicaid eligibility is $1,600. However, some property is not counted. Wedding and engagement rings and heirloom jewelry are exempt along with one motor vehicle. You can have unlimited term life insurance, $1500 of whole life, and $1500 in cash saved for final expenses.
Furniture and other household items are not counted, and your personal effects are not a factor. If you own a home, it will not count at first, but there is a Medicaid estate recovery mandate. The program can place a lien on the home after your death if it is in your personal possession at the time of your passing.
2023 Medicaid Spousal Allowances
Now that we have provided the necessary background information, we can get to the primary point of this post. When a healthy spouse can remain at home while their spouse enters a nursing facility, the independent spouse is entitled to a couple of allowances.
One of them is the Community Spouse Resource Allowance. This is half of the countable assets, but there is a limit. It is equal to half of the countable assets, and in 2023, the maximum is $148,620. There is also a minimum allowance, and it stands at $29,724.
The income that is earmarked for the Medicaid beneficiary has to go toward the cost of the care that they are receiving, with the exception of a small personal needs allowance. However, if a spouse that is living independently is relying on the income, this requirement is waived.
Under those circumstances, the healthy spouse can receive a Monthly Maintenance Needs Allowance. There is a maximum allowance of $3715.50, and the minimum allowance is $2288.75.
As we have stated, a home is not counted, but there is an equity limit unless a healthy spouse remains in the home. If there is no spouse that will be living in the home, the equity limit in 2022 is $1.033 million.
Irrevocable Medicaid Trust
Elder law attorneys help clients prepare for these expenses, and most seniors will require paid living assistance eventually. This can be done through the utilization of an irrevocable, income only Medicaid trust.
Generally speaking, assets that are held by the trust would not be counted if you apply for Medicaid. However, there is a five-year look back period. The trust must be funded at least 60 months before you apply for coverage.
You could continue to receive income from the assets that are held by the trust while you are waiting out this 60 month period. A lot of people rely on the income, and they have no intention of spending the source of it. As a result, this can be a very effective solution.
Plus, you can potentially convey your home into the trust as well, and it would be protected during the Medicaid estate recovery phase. They would not be able to place a lien on the property after your passing if you ultimately become a Medicaid beneficiary.
Take Action Today!
If you do not have a plan for aging that culminates in the effective passing of your legacy, action is required. We can gain an understanding of your situation and help you devise a plan that is custom crafted to suit your needs.
You can schedule a consultation at our Glastonbury or Westport, CT estate planning offices if you call us at 860-548-1000, and you can alternately use our contact form to send us a message.
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