He has went down hill since he had his triple bypass almost 2 years ago. He won't eat, he cant dress himself and his wife is very depressed. Its taking a toll on her. If we were to put him in a nursing home, will she loose her home and the little money she has?
MIL would be considered the "COMMUNITY SPOUSE" and as such is allowed to keep a much higher level of assets than an individual applying to Medicaid can. Personally dealing with "community spouse" issues is sticky and I would suggest that you all get your in-laws documents together and see an elder law attorney. Plus you get to update all their legal which is important.
Medicaid NH rules have 2 tracks:
1. Track #1: for an individual or both going into a NH - this is where they are limited to having assets at 2K maximum and income at about 2K also. The exact figure depends on your state as Medicaid is administered by each state although it is a joint federal and state program. For example, income in TX is $ 2,094.00 a mo while LA is 2K.
2. Track #2: if 1 goes into the NH and the other remains at home as "the community spouse". This too depends on the state but MIL does NOT have to become impoverished for FIL to go into NH on Medicaid. she is the "community spouse" in Medicaid language, she will qualify for MMMNA (more on that below) and she also is allowed to have "assets" above the 2K limit because she needs that to maintain her situation within the community.
The amount of assets depend on each state's rules. Most states have it at 109K - yes, One Hundred and Nine Thousand Dollars in assets for the community spouse. Some states have the asset limit much lower. But whatever the case, she doesn't have to totally impoverish herself so he can qualify. For spouse's there's other issues, like how to deal with income if she never worked and her only income is his SS &/or retirement and she need's to get a MMMNA - minimum monthly maintenance needs allowance. (Say that 3 times fast!) These are all sticky, you'll likely need someone to work with you in figuring that out. The MMMNA is based on the state's AVERAGE and seem to be on the low side and often the community spouse will have to do an appeal to the state for more MMMNA or get a court order for spousal support to get more monthly support.
part 2 next
For couple's, Day 1 of "institutionalization" is the key date for finances, the "snapshot" day. The snapshot day is mucho importante as whatever you all do with their finances has to be done & cleared through the bank BEFORE that day to make it all work as easy as possible. So say they still have a small mortgage, and they decide to pay if off as part of their spend-down, then you need to allow for time for the whole mortgage pay-off to be done...and it won't happen overnight.
I would suggest that you first find out what the asset ceiling your IL state has for community spouse then go through their paperwork to find out where they stand in their total assets. Make sure you keep assets and income separate as they are looked at differently for Medicaid. Assets are savings, investments, any insurance that has a cash value, etc. Income is whatever they get each month, like SS & retirement or a monthly annuity.
If your parents have assets they are expected to do private pay @ the NH or "spend down" assets to get to their state's couples asset ceiling to be Medicaid covered. If mom is still healthy and could continue to live in the house for years & years, then spending-down on things for the house is often the best thing.....could be paying off the mortgage or a HELOC or paying for a new roof, new AC/heat or other delayed repairs on the house or getting the house bathroom re-done to accomodate mom better as she ages. If you do this route, you need to spend and pay for everything before the Medicaid application is submitted and checks cleared.
If the house is just too big or too much for mom solo, they could sell the house and buy something of the same value as what they sell the house for. This too can work if mom is likely to live a long while longer and is in pretty good health. The key on this is having the house / house value be about the same so that it is NOT increasing their assets. Understand? If their marriage is more of a May - December one, this is often done and a really good idea. It may be hard to have them accept doing this, but what you want to avoid is MIL being in a just too big old house that is costing to maintain and may be difficult to sell later on. The attorney will suggest how to best maximize her assets in how the house is titled and dealt with in her will.
For couples, your MIL would be a "community spouse" as such the asset ceiling is higher and is limited to ½ of couple's joint assets.This is called “spousal protected resource allowance” equal to one-half of the countable resources but not more than $109,560 in 2011. I think it’s this amount for most states but can vary.
All assets are counted against these limits unless the assets fall within the short list of "noncountable" assets:
-personal possessions,
-1 vehicle (regardless of value),
- their principal residence, provided it is in the same state in which the individual is applying for coverage & the house may be kept with no equity limit if the Medicaid applicant's "community spouse" lives there;
-prepaid funeral plans and a small amount of life insurance.
Over that they must “spend down”.
“Spend down” – means get assets (excluding “non-countables”) under the state’s Medicaid asset ceiling. If they have a home, prepay for utilities, cable, insurance, repairs. If your mom is planning on staying at the home, spending down by doing repairs or paying off the mortgage, is often a super good plan.
For spouse's there's other issues, like how to deal with income if she still works or if she never worked and her only income is his SS &/or retirement and she need's to get a MMMNA - minimum monthly maintenance needs allowance.
Transfer penalty: there can be no $ or assets gifted to others. If anything is sold, it needs to be done at fair market value. If you don't there will be a "Transfer Penalty". The penalty is pretty severe and is for the period of time during which the person transferring the assets will be ineligible for Medicaid. The penalty period is determined by dividing the amount transferred by what Medicaid determines to be the statewide AVERAGE private pay cost of a nursing home in your state.So if the average monthly cost of care is 5K, and dad transfers a property worth $100,000, he will be ineligible for benefits for 20 months.
For couples, getting rid of the extra car is often the glitch as they give it to one of the kids for free and then have a Kelly blue-book based penalty for the value of the car hit them. Property ownership is recorded by the state so it's easy for the Medicaid to do a cross check for registration. So that 20K car is 4 mo. penalty. For couples, where 1 is staying @ home and they have 2 cars, the best idea is to sell or turn-in BOTH cars and then get 1 new or newer and more dependable car for MIL to drive.
For couples most of them do their insurance so that they are each other's beneficiary. You will need to change their insurance so that it does not go to each other (having it go to grandkids is often good as they have no taxes). This too will take time to do. You do this because, say they have a 50K policy, well if dad dies, then mom is 50K better off. BUT if mom may need a NH in her future, then you have to deal with her spend-down with an extra 50K in it now, so mom can go on Medicaid so you want to have it go somewhere else. The other problem is if say mom has a car accident and dies, then the in the NH and on Medicaid dad is the beneficiary of the insurance and accidental death policy. He now has 50K in new assets and it screws up his Medicaid. Again you want to avoid that happening by changing the beneficiary. Understand?
My point is there is no quick fix. All these issues are sticky to begin with and with the "community spouse" issue it's super sticky, IMHO you'll need to hire an eldercare &/or estate planning attorney. Your in-laws should pay for this as it is a totally acceptable spend-down and also if they pay for it, it implies they wanted to do all this. just in case there is family friction later on. This site has a list of elder law attorneys by state, I'd start there first. Good luck.
Sunny:)
Also, please note that some states add up all the property of both spouses and divide by 2, then allow the at-home spouse to keep their half so long as it does not exceed $115,900. Other states do not divide by 2 and simply allow the at-home spouse to keep the first $115,900 of the couple's total assets. I have a chart in the back of my book that shows the rules for each of the 50 states, or call your local Medicaid department to find out your own state's rules in this regard.
Best wishes to all of you.
You need to find out what your state has as the "community spouse" asset limit.
Please re-read what Mr Heiser wrote as to how this can vary by state. You need to know what your state does before you get all worried.
Your house is totally an exempt asset, the house DOES NOT COUNT IN THE ASSET AMOUNT. And if you still are the at-home & plan to stay at home spouse can have any value. But 1 thing that happens for the community spouse is that the house could be too difficult or expensive for them to maintain; or still has a mortgage on it or other significant costs that will cut into your savings or that will cut into your monthly income to the point that you don;t have enough money.
Its hard to take all this in while still trying to keep it together to be a caregiver for a older spouse. Really if you can go to see an elder law attorney who is certified in your state. This site has a list of attorney's you can call. Good luck.