As you age you may think more and more about the likelihood that you will need long-term care one day in the future. You may also be contemplating the cost of that care which runs, on average, over $75,000 a year in the United States. Not surprisingly, about half of all seniors end up relying on Medicaid to help cover the high cost of long-term care. Medicaid eligibility, however, depends on your income and assets. If the value of your countable resources exceeds the program limit ($2,000 for individuals and $3,000 for couples in most states) you may be forced to “spend down” your assets before Medicaid will start covering the costs. Where does that leave your spouse though if he/she remains in the community? Ideally, you will have included Medicaid planning in your overall estate plan so your assets are protected and available for your spouse; however, if you failed to include Medicaid planning the Medicaid spousal impoverishment rules may help to some extent.
As more and more seniors began relying on Medicaid back in the 1970s and 1980s it became clear that the Medicaid eligibility requirements were effectively leaving the at-home spouse without any resources. In 1988, with this in mind, Congress enacted provisions to prevent what has come to be called “spousal impoverishment,” leaving the spouse who is still living at home in the community with little or no income or resources. Under the Medicaid spousal impoverishment provisions, a certain amount of the couple’s combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse’s use.
The Spousal Impoverishment Rules set standards every year for things such as the Minimum and Maximum Monthly Maintenance Needs Allowance as well as the Community Spouse Monthly Housing Allowance. These standard will ultimately determine how much income and or assets a community spouse may hold onto when a spouse receives Medicaid benefits.
By far, the best way to protect you, your spouse, and your assets is to include Medicaid planning in your overall estate plan early on in your life. If you have additional questions or concerns about Medicaid planning, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.
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