We recently handled a case where we successfully obtained an increase of the amount of assets that could be transferred from an ill spouse to a well spouse in order to keep the well spouse in the community longer and without suffering from the nursing home Medicaid spend down of the ill spouse.
- Husband and wife.
- Husband – mentally incompetent and residing in nursing home due to debilitating effects of a stroke. No Powers of Attorney.
- Husband – monthly nursing home cost out of pocket – $6,500 per month.
- Wife – healthy, living in the community.
- Husband does not qualify for Medicaid nursing home coverage.
- Ill husband’s separate assets: $56,000.
- The well spouse’s separate assets: $22,000.
- The joint assets of the ill spouse and the well spouse: $90,000.
- Real estate held by both spouses ½ each as tenants in common value: $275,000.
The Result (quite favorable for our client):
1. The ill spouse could legally transfer assets to the well spouse.
2. The well spouse’s assets increased by $146,000 so that she would be able to keep $169,250 in order to remain in the community instead of the lesser statutory $104,400.
3. The ill spouse was to transfer the automobile ($10,000) and the household furnishings ($10,000) to the healthy spouse so that the healthy spouse could live in the community longer and in a more financially secure way.
4. The ill spouse’s interest in the family residence ($137,500) was transferred to the well spouse so that the well spouse owned 100% of the residence ($275,000).
5. The ill spouse was required to divert his social security income of $1,100 and his pension income of $400 as well as his IRA retirement income of $200 to the well spouse to be added to the well spouse’s own income of $600 per month. Thus, the well spouse’s total income retained while the ill spouse’s in the nursing home totaled $2,300 instead of just $600 per month.
6. Ill spouse will now qualify for Medicaid coverage at nursing home.
The client was as happy with the results as we were.
Moral of the story: Do not put off long term care planning. In this case, our request for relief was granted for the well spouse living in the community.However, it is not always possible to obtain relief. Rather, these types of planning arrangements can be done earlier with qualified legal counsel. You should take it upon yourself to do this kind of planning well in advance of the time you are in a nursing home or before you become incompetent as in the case of the ill spouse in this illustration.
The time to plan is now. Take advantage of the opportunity to “Pre-plan” by calling us at (847) 563-4887.
P.S. Our Special Workshops:
As a notice to our readership, please be aware of the following upcoming dates for our free workshops entitled “5 Step Plan – Legally Protect Your Assets From Nursing Home Costs“:
August 14, 2008 at 4:00 pm
August 28, 2008 at 7:00 pm
•- Call (847) 292 1220 to make a reservation in our training room.
•- You don’t want to miss this workshop!
The “3 Phase” Lawyers
Legal Counsel Assisting You in the 3 Phases of Your Life:
•- Maturing Years
•- Senior Years
•- Post Death Years
“Educate to Motivate”
Anthony B. Ferraro
The Law Offices of Anthony B. Ferraro, LLC
Columbia Centre I
5600 N River Road, Suite 764
Rosemont, IL 60018
Note: Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.
This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice. You should never attempt Medicaid planning, Estate planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.