Will I Lose My Home if My Spouse Goes into Long-Term Care?

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Long-term care can be expensive, and many people who enter it turn to state Medicaid programs to help cover the costs. To do so, however, a person must have a minimum of available assets. This is because Medicaid is a payer of last resort, and it requires you to use your own assets—including the proceeds of any potential sale from homes and other property you own—to cover care when possible.

However, in cases where one spouse needs long-term care and the other spouse is still healthy enough to live at home, the healthy spouse is covered by some protections. That includes the ability to keep the home. Find out more about healthy spouse protection and Tennessee’s Medicaid program, which is called TennCare CHOICES, below. Then learn why you might want to work with an elder law attorney.

Medicaid Healthy Spouse Protection for Your Home

When you apply for Medicaid, your assets are considered to determine if you are eligible for assistance. If you have too many assets, you can be denied, which leads many people to spend down their assets before applying for coverage. This can include selling a home and using the proceeds to cover long-term care for a period of time. Once those proceeds are gone and other assets are used up, the person can apply for Medicaid.

However, Medicaid does not consider certain assets if there is a healthy spouse in the picture—including a homestead and related property up to a maximum value. The maximum value is set by the Tennessee Medicaid program and can vary from year to year.

The exclusion of the homestead in a case where the healthy spouse is still living in the home means that the value of the property isn’t a factor in whether the other person can get Medicaid. It also means the house doesn’t have to be sold to cover any care costs.

Note that there are some exceptions that have nothing to do with Medicaid, however. For example, if the spouse who needs long-term care has a reverse mortgage on the home and the healthy spouse isn’t on the mortgage or title of the home, they aren’t protected. In this case, the reverse mortgage would need to be paid back if the sick spouse is no longer living in the home. If the healthy spouse can’t pay the mortgage back, they may need to sell the home.

Other Protections for the Healthy Spouse

Houses aren’t the only thing excluded and protected for the healthy spouse. The spouse can also keep the following:

  • One vehicle, up to a certain value
  • Cemetery plots
  • Prepaid funeral and burial plans
  • Half of all other marital assets, including cash, up to a certain value that can change annually

Medicaid also only considers the monthly income of the spouse applying for assistance. If the non-applicant spouse has any income, it is not considered or impacted by the sick spouse applying for Medicaid. 

In some cases, however, the healthy spouse may not have enough of an income on their own to appropriately cover their living needs. In this case, they may be eligible for what is called a Minimum Monthly Maintenance Needs Allowance, or MMMNA. 

The MMMNA is an amount set each year for what one spouse needs in income each month to not fall into poverty. This amount is set specifically by state Medicaid plans, so it varies depending on the state. If the healthy spouse doesn’t have enough income to meet the MMMNA, they are able to get an allowance from the other spouse’s income that is excluded from Medicaid spending requirements. 

How an Elder Law Attorney Can Help

Paying for long-term care with Medicaid is a complex process that has not been covered here in anything close to a comprehensive nature. Even the protections for the healthy spouse are much more complex than has been summarized above, in part because so many individual factors must be considered. Working with an elder law attorney to plan ahead for Medicaid and long-term care needs can help you work out these details in your own case for the best possible outcomes.

Some ways an elder law and estate planning attorney can help include:

  • Working with you to proactively plan ahead to cover long-term care, including offering advice about long-term care insurance options
  • Setting up trusts to protect some assets so a healthy spouse has access to them in the future
  • Helping you understand the specifics of Medicaid spend-down and other requirements so you can make the best choices for your situation
  • Advocating for your best interests throughout the process, including with nursing homes and other agencies

If you or your spouse are concerned about the need for long-term care in the future, now is the time to act. Whether the need is looming shortly or is simply a possibility years from now, you can work proactively to protect your assets and each other. Contact Crow Estate Planning & Probate to find out how our elder law teams can assist with financial planning, Medicaid planning, creating trusts, and advocating for your best interests throughout the entire process.

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