While married individuals have plenty of benefits and options available to preserve their assets, while also securing Medicaid eligibility, a single person may not have quite the same opportunities. This is true because a married couple’s assets are counted in total when determining the assets available for expenditure on long-term care. A single person’s income is countable towards long-term care expenses, except for an allowance for medical insurance and $72.80 per month for a personal needs allowance.
Even a Prenuptial Agreement will not hold up to protect a couple’s assets in the unfortunate event that one spouse becomes incapacitated and needs long-term nursing home care.
So what should one do? Divorce?
Well, that is one option, and Attorney Darling appeared on the Today Show regarding this topic. But there are other options. Unfortunately, the choices are not optimal, since you will have to part with your assets irrevocably five years before you become ill. This means that your assets have to be either gifted or transferred to a trust. You may also transfer your house to your children, with or without the right to live in it, (called a life estate,) or you may consider purchasing long-term care insurance.
The previous law included a three-year waiting period, but that changed in February of 2006, so any transfers made prior to that time are “grandfathered in” under the prior rule, where the waiting period would exempt those assets.
In any event, it is not an easy decision to transfer assets outright, without future use of them, and it is also important to comply with the rules, since there is not much gray area in this process. In order to comply with the exceptions to the rules, the regulations must be followed carefully and strictly. Mistakes are often not forgiven and very difficult to fix when there is a crisis situation.
Anyone dealing with these issues should not rely on advice given to them by their friends, neighbors, or other individuals, but should seek the counsel of a qualified elder law attorney. That is the only way to assure that you are making the correct decisions.