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Medicaid planning can help protect family assets

Aging New Yorkers may have significant concerns about how to protect their assets that come hand in hand with planning for their medical futures. When older people are considering or need to access the long-term care provisions of Medicaid, including nursing homes and other types of residential facilities for people dealing with serious disabilities or major health needs, the Medicaid rules about assets can come into play. Married couples in particular may be concerned about how to deal with Medicaid rules when only one of the partners needs to access long-term care or a nursing facility.

When a single individual needs to access Medicaid's nursing home coverage, that person can have no more than $2,000 in countable assets. Married couples are handled differently under law when there is a healthy spouse, called the community spouse in Medicaid terms. There are some types of assets that are excluded from consideration when determining eligibility for Medicaid coverage for nursing home care, including the primary home where the healthy spouse lives, one vehicle and life insurance that does not have cash value until after death. All other types of assets can be counted, and the healthy spouse can only retain about $121,000 of these assets.

The financial crisis of long-term care can be so severe that couples even consider divorce when seeking to protect their assets. Others may give large gifts to family members. However, even these kinds of transfers can be reviewed by Medicaid under the five-year look back rule, which delays eligibility for Medicaid based on prior transfers. This also includes divorces that have the effect of wealth transfer.

Older Americans have many reasons to prioritize Medicaid planning, as spending down for these purposes can have a significant impact on their quality of life. An elder law attorney can often work with individuals and couples to structure their assets to help ensure that the majority of nursing care expenses are covered by Medicaid.

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