They currently live on their social security checks to pay the rent and bills. If one of them needs long term nursing care, we don't want what little savings there is to be used up, leaving nothing for the other one.
JessieBelle has it about it. If your parents live in the same state as you, Florida, the Community Spouse (the spouse not receiving Medicaid) can, 2014 retain a minimum of $1,939 of the couple's combined monthly income and up to $117,240 in assets (in addition to the house, car, and personal effects). From your description of your parent's circumstances it appears no pre-planning is required. Make sure, however, that you have valid and complete Powers of Attorney and Health Care Surrogate Proxy's for both of them.
If they have minimal assets and you live in the USA, you can apply for Medicaid if one needs to go in a nursing home. The state will look at what assets are available and leave the spouse living in the community with enough money to pay the bills. You want to be really careful spending the money, since Medicaid may be in the future. Make sure you can account for all the money that is spent, and there is no allowance for sizable gifts to anyone. Medicaid has a look-back period, usually of 5 years, when financial records are analyzed. If the savings account is small and you foresee a nursing home for one of your parents within the next five years, you will want to think about ways that the money could be put to best use. The community spouse will probably be able to keep all of it if there isn't much. There are also valid expenditures, such as prepaid funeral expenses or home maintenance. I hope that others more experienced with Medicaid than I am will be able to comment more.
To clarify, if their assets total $20,000 in a savings account and a car, can the Community Spouse keep half of that or $10,000 for future needs? Or do we need to divide the money into separate savings accounts for each of them?
If your parents live in the same state as you, Florida, the Community Spouse (the spouse not receiving Medicaid) can, 2014 retain a minimum of $1,939 of the couple's combined monthly income and up to $117,240 in assets (in addition to the house, car, and personal effects).
From your description of your parent's circumstances it appears no pre-planning is required.
Make sure, however, that you have valid and complete Powers of Attorney and Health Care Surrogate Proxy's for both of them.