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My wife is in a nursing home and soon we will have to apply for Medicaid in Wisconsin. I just found out that she is the beneficiary of my late son's 401k, about $70,000. I still live in a home jointly owned by me and my wife. Now could we spend down these proceeds to fix up are house, roof gutters , furnace, burial arrangements. Or, do we just hand this money over to the nursing home and the State of Wisconsin due to the fact she has been residing at the nursing home already?? Is there a internet site that would give me specific information? This is all we will have as far as assets are concerned when she receives the money from the financial firm. Our house only has $8000 in equity and valued at $124,000.

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John, the timing of receiving these 401k funds and the expenditures for the home and burial arrangements are critical (and yes, they are legitimate expenditures for Medicaid spend-down, but again, the timing is very important). Also, depending on what your other countable assets are, this inheritance may help in allowing you to maximize your community spouse resource allowance. For these reasons, and for further protection for the house against any potential estate recovery concerns, I would urge you to speak with an elder law attorney that focuses on Medicaid planning.
As for specific websites, www.dh.wisconsin.gov/medicaid has some good resources on their site, as well as www.longtermcarelink.net.
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John, haven't they referred you to a benefits consultant ? We were referred to a no fee Elder Resource Benefits consultant by the Assisted Living facility.
See if your county has free legal services for the Elderly. Many do.
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You really need experienced - like a NAELA - elder law attny & ASAP before you or her take receipt of proceeds. The insurance co can wait to do payout. You are considered the "community spouse" & as such you do NOT have to become impoverished only NH one does. you may need to structure receipt of $ so that it's community property but yours as a CS and under the asset limit for a CS. Most states CS asset cap is 113K, you may be there even with the 70K. But if not, hopefully there are likely something done to enable you to keep all funds without any medicaid issues for wife. Like you do a Medicaid compliant SPIA for whatever is over the 113k - these are not DIY projects, you need it done correctly. House is exempt asset & doesn't count btw.
Really you need legal & soon.
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You should talk with an elder law attormey that specializes in Medicaid planning.
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