No one wants to spend their golden years in financial stress. For many couples, the rising cost of long-term care threatens to drain their life savings. Often, one spouse ends up impoverished. Fortunately, elder law provides strategies to help protect your assets and prevent spousal poverty.
When one spouse enters a nursing home, the other can face devastating financial losses. Without proper planning, many couples are forced to spend down their assets to qualify for Medicaid. Elder law attorneys help families avoid financial losses and ensure both partners in the marriage maintain economic security.
What Is Elder Law?
Elder law focuses on legal and financial planning for aging adults. This area of law includes services designed to provide financial protection for couples. Elder law includes estate planning, long-term care planning, Medicaid eligibility, and guardianship.
Elder law attorneys are familiar with the complex rules governing benefits. They help families prepare for the high cost of long-term elder care.
Medicaid Spend-Down
To qualify for Medicaid, a person must have very few assets. In many states, this means having no more than $2000 in countable resources. The government expects couples to use their savings to pay for care before qualifying for Medicaid.
The spend-down process can leave the healthy spouse with little to no financial resources to live on. One partner’s illness can wipe out a lifetime of savings very quickly. Elder law can help couples structure their finances to avoid financial wipeouts.
Spousal Protections Under Medicaid
Federal law includes several protections for spouses:
- Community Spouse Resource Allowance: This rule allows the healthy spouse to retain a portion of the couple’s assets, typically between $30,000 and $150,000.
- Minimum Monthly Maintenance Needs Allowance: This rule ensures the community spouse has a minimum level of monthly income.
Even with these protective rules in place, many couples still risk losing more money than they should. Elder law attorneys can help maximize spousal allowances and avoid unnecessary spend-downs.
Legal Strategies
Elder law attorneys can help couples employ several strategies designed to protect their assets while qualifying for Medicaid.
- Asset repositioning: Transferring your assets from countable to non-countable can be beneficial. For instance, you can invest in a primary residence or prepay for burial expenses.
- Medicaid-compliant annuities: These help convert large sums of cash into income for the healthy spouse. You will not be penalized by Medicaid.
- Spousal refusal: In some states, the healthy spouse can refuse to pay for the care. This shifts the burden to Medicaid without penalizing the healthy spouse.
These strategies are highly technical and must be adhered to carefully. Hiring an elder law attorney can guide you and your spouse through the process to understand which methods will be most beneficial.
Planning Ahead Matters
The best time to plan is before a crisis occurs. Many elder law strategies are most effective when implemented with sufficient time and planning. Waiting until your spouse needs immediate care can drastically limit your options.
Even if you are already facing high medical costs, it’s not too late to seek help. Elder law attorneys can still help. Elder law helps couples protect their hard-earned savings and assets to maintain financial stability and security. The right legal strategy can make a significant difference. If you or your spouse faces the possibility of long-term care, it is crucial to speak with an elder law attorney to secure your future.