Are my assets protected if my wife or I move to a nursing home?

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How to Protect Assets If Spouse Goes to a Nursing Home


While so many people are financially prepared for the amount they will need in retirement, many fail to consider how a disability may change their situation. Unfortunately, disability is the most common reason for nursing home placement. By educating yourself on relevant Medicaid laws and different methods of asset protection, you can maintain your standard of living if your spouse needs long-term care.

Protecting assets is always a complicated situation so you may find it beneficial speak with a financial advisor One who is proficient in meditation.

What Happens to Your When Your Spouse Goes to a Nursing Home?

When your spouse goes into a nursing home, they may be eligible for Medicaid to pay for their care. The state you live in will determine your spouse’s eligibility and will only count your spouse’s assets when calculating Medicaid eligibility. The spouse (known as the ‘community spouse’) not living in the nursing home is usually allowed to keep half of the couple’s assets. known as Community Spouse Resource Allowance (CSRA), this regulation allows the community spouse to receive up to $137,400 from the couple’s estate.

Unless their income exceeds a certain threshold, the community spouse will not be required to help with nursing home expenses, even if they are still working. Conversely, if the community spouse has a low income level, they may be entitled to a share of the income of the spouse attending the nursing home (known as the “institutionalized spouse”). There are other ways in which assets can be protected besides the normal legal rights of the institutionalized spouse.

What is Minimum Monthly Needs Allowance (MMMNA)?

The calculation that determines how much money a community spouse keeps is called the minimum monthly requirement allowance (MMMNA). Medicaid spousal protection laws set a minimum of $2,177.50 per month in 48 states, including the District of Columbia. Hawaii’s is $2,505.00, and Alaska’s MMMNA is $2,721.25, due to the high cost of living in both states. The maximum amount is $3,435 per month. Once calculated, the government does not count it as income when deciding whether an institutionalized spouse is eligible for Medicaid.

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In addition, suppose you or your spouse are trying to get Medicaid and you have given to your family members. in the last five years, Gifts can make a spouse ineligible for a certain period of time in a nursing home. The government will expand ineligibility according to the value of the and the state average rate for nursing home care. These are things that can be avoided and planned for in advance so that both you and your spouse can maximize dollars in this situation.

How To Protect Assets If Your Spouse Goes Into Nursing

How to Protect Assets If Spouse Goes to a Nursing Home

How to Protect Assets If Spouse Goes to a Nursing Home

If Your Spouse Moves into a Nursing Home, That Doesn’t Mean You Have to Dip Your Hard-Earned Money Savings And retirement accounts In the expenses of your institutionalized spouse. Instead, there are four ways you can use your finances to get some sort of benefit from your nest egg while still making Medicaid payments for nursing home expenses.

1. Buy a Medicaid-complaint annuity

A Medicaid-compliant annuity Can help institutionalized spouses qualify for Medicaid. Paying for an annuity can stretch a couple’s resources, which can actually help a couple in this situation. The advantage is that the institutionalized spouse has fewer reportable assets and is more likely to be eligible for Medicaid assistance. In addition, community spouses will receive monthly payments from the annuity and use them as they please instead of for nursing home expenses.

2. Draft a Life Estate for Your Real Estate

A life estate Legally gives ownership to one spouse and gives the other spouse the status of ‘residuary’, meaning they are designated to inherit the upon the spouse’s death. Once in effect, a life estate prevents state governments from trying to take the estate. Whether a spouse dies in their home or a nursing home, the remaining person inherits the property.

An asset transfer through Life Estate counts toward Medicaid’s five-year asset-transfer period. If the institutionalized spouse passes away within five years of drafting the life estate, the community spouse may have to pay a hefty penalty to Medicaid.

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3. Buy long term care coverage

long term care insurance Helps couples meet the expenses of an institutionalized spouse with a chronic health condition or problem that leaves them unable to care for themselves. However, this coverage is expensive, and you may never use it if you or your spouse don’t attend a nursing home. That said, purchasing long-term care insurance can reduce your assets and help a spouse in a nursing home receive Medicaid assistance.

4. Shelter Assets With an Irrevocable Trust

an irrevocable trust – or in this case, a Medicaid Trust – One should pause before creating. Control of a significant portion of your assets should be for just a few reasons: to keep assets from creditors, to reduce taxes, or to become eligible for government assistance. about the subject at hand, wealth and property Entrustment to an irrevocable trust will not count toward qualifying for Medicaid. Therefore, irrevocable trusts can help you obtain government assistance for nursing home costs.

However, you should make an irrevocable trust only after considering the pros and cons. You will be giving control of most or all of your money to a trustee. You will most likely lose access to the funds in the trust and will only receive income from the principal amount of the trust. Additionally, if you want to sell your home and downsize, you’ll need your trustee to sign over to it.

A word of caution for protect your

How to Protect Assets If Spouse Goes to Nursing Home

How to Protect Assets If Spouse Goes to a Nursing Home

How much income the community spouse receives varies between states. One way to avoid the limit is to allow each minor or dependent child living with the community spouse a 33% increase in the monthly amount.

Because of which omnibus budget reconciliation act of 1993Medicaid can reimburse you from your estate for nursing home expenses after your death. When you do not properly shelter your assets, it is possible for seizure. Taking your may leave your intended beneficiaries empty-handed.

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There are limits on financial gifts to family before you owe taxes. In 2022, if your gift to a family member in the form of cash or exceeds $16,000, you must file a gift tax return with the IRS.


Planning ahead for the possibility of you or your spouse ending up in a nursing facility is essential to protecting your assets as you age. If this happens, there are ways you can preserve your money and assets by taking action well in advance. From buying to getting long-term care coverage perfect annuityThere are ways to put yourself in a better position when this happens.

Tips on Retirement Planning

  • A financial advisor can help you find long-term care options. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s Free Tool Matches you with three financial advisors serving your area, and you can interview your advisor matches for free, to decide which is right for you. If you are ready to find an advisor who can help you achieve your financial goals, get started now,

  • Retirement and long-term care planning isn’t always easy. For help, see SmartAsset’s Retirement Tax Calculator Which helps you determine the most favorable position to retire from a tax perspective.

  • It can be confusing trying to figure out how much money you need to save at any given time so that you have enough for retirement. You can check our resource on average retirement savings by age To learn more and to know how close you are.

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