Recently, Mary came into our office seeking assistance because her 89 year old husband, John, entered a nursing home after suffering from a heart attack. Their combined assets consist of their Flint home, 1 vehicle, and $150,000 in checking, savings and CD accounts. Mary was concerned that she was going to lose everything, including her husband’s pension and social security income in order to pay for the nursing home. She was relieved to learn that the following options allow her to protect her assets so she can continue living in their home:
1. Pre-pay funeral expenses. Under the Medicaid rules pre-paid funeral expenses are an exempt asset. This is often referred to as converting a countable asset into an exempt asset.
2. Home repairs and a new car. Both the home and car are exempt assets so it is permissible to spend money on a new car and make repairs or improvements to the home under the Medicaid rules.
3. Spousal annuity trust. The Medicaid rules permit a special trust called a “spousal annuity trust” to be used to protect excess assets. The Michigan Department of Human Services’ wrote the Medicaid rules to provide a spouse with the option of not having to spend down half of their assets. The half that would otherwise have to be spent down can be placed in a Spousal Annuity Trust allowing the Medicaid recipient and their spouse to keep all their money without any spend down.
4. Burial space items. The Medicaid rules permit the purchase of burial space items for children and their spouses.
Remember, the Medicaid rules are very case-specific. Before spending down all of your hard earned assets, be sure to consult with an experienced elder law attorney.