What would happen if your spouse or mom or dad went into a nursing home? How would you/they pay for it? The average cost for a semi-private room in a nursing home in Iowa is between $80,000 and $90,000 annually, according to the Genworth Cost of Care Study for 2019.
Let’s imagine that dad had a stroke or is disabled by dementia. Your mom is still alive and will need money to live on after your dad dies. Does she have to spend all her assets to qualify dad for Medicaid ?
There is important information that we all need to know. It is not necessary for mom (under the law called the “Community Spouse”) to be completely impoverished in order for dad (the “Institutionalized Spouse”) to qualify for Medicaid.
Before 1988, all of a couple’s assets were required to be “spent down” so that the ill spouse could qualify for nursing home care. The couple’s only alternatives were utter impoverishment or divorce.
In 1988, Congress passed provisions now known as the Spousal Anti-Impoverishment Act. If correctly applied, this law allows the Community Spouse, in Iowa, to keep half of the assets with a minimum amount of $25,728 and a maximum of $128,640.
The Institutionalized Spouse must spend his half so that he only owns $2,000. But there are “Medicaid friendly” ways to spend down such as pre-paid burial plans, home improvements and purchase of a vehicle.
There are also legal ways to assist an unmarried senior to quality for Medicaid.
The bottom line is this: when someone who is not already impoverished goes into a nursing home it’s time to call us at KLG to see how we can help. Especially when that person has a living husband or wife, assets can be set aside to help the Community Spouse afford living expenses to pay for his or her own care in the future.
If you would like a free Estate Planning/Medicaid Planning Strategy Session, please click here.