If My Spouse goes into a Nursing Home, will I lose Everything?

I often hear people say that a friend (or neighbor, or church member, etc.) told them the nursing home will take their house, or they will have to assign all their assets to the nursing home if their spouse has to go into one.  With social media being what it is, I often see people post questions on community Facebook pages about their loved one needing help (and the numerous posts that, although well-meaning, usually have some bad advice in them).  So, here is some free advice from your friendly, Florida Board Certified Elder law attorney.

First of all, there are programs which can help pay for care in a nursing home (or assisted living facility or even at home).  I have written many blog posts about the various programs (click here – Managed Care and here – Transitioning to Assisted Living for past posts).  This blog post is meant to calm some fears and to specifically discuss Medicaid benefits and how it applies to those with a spouse living at home or in the community (such as an ALF) while the other spouse needs help paying for their care.  There are rules about what the “community spouse” (the one not needing Medicaid) can keep in the way of assets.

In Florida (and please understand that, although Medicaid is a federal program, the rules can vary from state to state), the community spouse can keep their homestead and one vehicle (as can a single individual on Medicaid).  These assets are considered “exempt”, meaning that Medicaid does not count the values of these assets when determining what other assets a community spouse (or individual) can keep.  One caveat – the value of the homestead, in Florida, is exempt so long as the value does not exceed $552,000 (and this amount increases every year).

In addition to the homestead and a vehicle, the community spouse may keep up to $119,220 in additional assets (and this number usually increases annually).  What is an asset?  Good question.  Assets include bank accounts (checking, savings, money market accounts, CD’s), investment accounts, cash value of life insurance, retirement accounts (if the community spouse is not taking minimum distributions), real estate that is not homestead or rental property, annuities (that are not qualified accounts and/or not Medicaid compliant), etc.  There may be other types of assets I am not listing, but you get the picture.

Good news if you are a spouse who is over 70.5 years of age and has retirement accounts.  As long as you are taking the required minimum distributions (which you must do once you hit 70.5 years old), your retirement accounts do not count as an “asset”.  The income you receive from the distributions can count against you, however.

What do I mean by that?  Medicaid does not normally look at a community spouse’s income – the community spouse can keep all of their income (whereas, the applicant spouse or the spouse who needs Medicaid cannot have more than $2,199 in income and the income is paid to the nursing home).  However, if the community spouse’s income is too low (below $1,991), Medicaid may allow the community spouse to receive some of the applicant spouse’s income – this is known as spousal diversion of income.

You may also notice that I mentioned that rental property is NOT considered an “asset” for Medicaid purposes. This is because, if you own real estate that produces income, the value of the real estate will not count for Medicaid purposes, but the income received from the rental of the real estate will be considered as part of the community spouse’s income or the applicant spouse’s income, or both.

Would you like additional guidance from a knowledgable attorney? Schedule a complimentary phone consultation with Attorney Laurie Ohall by calling 813.438.8503 or online.