Financial tips for the community spouse

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One of the most challenging decisions for any spouse is when to place his or her disabled partner in an assisted living facility.

The cost, logistics and emotional toll can overwhelm the healthy spouse and trigger a postponement that ends up being dangerous for them both.

Of course, we advocate setting up contingency plans and having honest conversations with each other about how you will handle it if one of you becomes disabled. Ideally, you will have time to analyze and purchase an appropriate policy to pay for long-term care, visit facilities together to pick out one you both approve, and write out a step-by-step plan you can activate should the time come.

Not everyone enjoys the luxury of time, though. Disabilities and scary diagnoses can sneak up through the shadows of our life and leave us shocked and ill-prepared. Should this happen (and, frankly, even if it doesn’t) you need to rely on the advocacy and wisdom of your financial advisor, preferably one with a fiduciary relationship to you.

Your advisor will be able to guide you through the prickly maze of protecting both the ailing spouse and the assets you’ve both accumulated over a lifetime.

While some advisors encourage their clients to divest themselves of their assets in order to qualify for Medicaid, we want you to understand that this plan can cause even more troubles down the road.

Most facilities cap the amount of Medicaid patients they accept, and those open beds fill up fast. In your effort to control the disbursement of your finances, you may lose the ability to choose the place you and/or your spouse will spend the rest of your lives.

While federal Medicaid rules protect a recipient’s home and the property the house is on when calculating Medicaid eligibility, these allowances can vary from state-to-state, especially when the recipient has no plans to return home.

Currently, monthly maintenance needs allowances range from a minimum of $2,113.75 to $3,160.50 and the home equity limits range from $585,000 to $878,000.

Additionally, most states require a five-year look back period that starts from the day you submit your Medicaid application. Any countable asset that was sold, transferred or gifted during this time period can result in a Medicaid ineligibility period.

There are appropriate ways to spend down your assets, like approved funeral trusts, home improvements, car purchases and medical expenses not covered by insurance, but it’s best to plan early to avoid the look back period in the first place.

If you have any questions about how you will plan and pay for nursing home or assisted living costs for you or your spouse, please call our office today to set up an appointment. We’d be glad to walk you through your options.