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Staying Eligible for Medicaid after the Death of a Spouse
- March 5th, 2018
When one member of a couple moves to a nursing home, we expect that spouse will be the first to die, but this isn’t always the case. What happens if a Medicaid recipient's spouse dies first? If planning steps aren't taken, the death of a spouse can affect the nursing home resident's assets and eligibility for Medicaid.
In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (the amount may be somewhat higher in some states). The Medicaid applicant's spouse (called the "community spouse") can keep more assets. In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $123,600, depending on the state (in 2018). Often when one spouse seeks to qualify for Medicaid, he or she transfers assets to the community spouse.
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Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...
Hale Ball Carlson Baumgartner Murphy PLC
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The Estate Planning & Elder Law Firm PC
Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...
The death of a Medicaid recipient's spouse can affect the amount of assets the Medicaid recipient has, and therefore his Medicaid eligibility. For example, suppose a community spouse dies, and her will leaves her estate to her husband, who is in a nursing home and receiving Medicaid. The additional assets will make the husband ineligible for Medicaid. Even if the community spouse's will did not leave anything to her husband, most states allow a spouse to claim a share of the estate. Medicaid can assess a penalty even if the husband does not claim his share.
The couple's house can also become a problem. Most spouses own property jointly. If the community spouse dies, the Medicaid recipient will own the house. Depending on the state, the nursing home resident may have to prove either an intention to return home or a likelihood of returning home in order for the house not to count as an asset. If the resident sells the house, the proceeds from the sale will make the resident ineligible for Medicaid.
To prevent a community spouse's death from affecting the institutionalized spouse’s Medicaid eligibility, it is important that the community spouse update his or her estate plan. There are steps the community spouse can take to protect the spouse in the nursing home, including setting up a trust. To find out the plan that would work best for you, contact your attorney.
Last Modified: 03/05/2018