It happens a lot. One spouse goes to the nursing home and is eligible for Medicaid. So, the family doesn’t do any post-death asset protection planning. But what happens if the “well-spouse” dies first. Well, it’s a nightmare because the well-spouse’s death may make the spouse in the nursing home ineligible for Medicaid.

As a result, Medicaid Planning must consider the possibility that the well-spouse may pass away first. This is because a married couple with one spouse in the nursing home can have about $126,000 of combined countable assets, while an unmarried nursing home resident can have only $2,000 of countable assets.

And you probably can’t disinherit the ill spouse, because except in rare instances, Florida requires that a surviving spouse receive at least 30% of the deceased spouse’s assets. And if the ill spouse refuses the inheritance, they will likely be disqualified from receiving Medicaid for a period.

To avoid this trap and ensure that the widowed nursing home resident has substantially more than $2,000.00 without disqualifying them from Medicaid, thoughtful estate or government benefits planning must occur; the well-spouse needs a plan that leaves at least 30% of her/his assets to a “Special Needs Trust.” This strategy works because assets owned by a properly drafted Special Needs Trust cannot be counted against the surviving spouse’s Medicaid Eligibility.

When anyone with significantly declining health or age 70+ is considering their post-death planning, they should talk to an estate planning attorney who has experience with long-term care asset protection strategies. If you have any questions or want to start planning for your future contact our office today.