Nursing Home Costs and Exempt Assets – Planning For Your Family

By Dennis McAndrews, Esq.

 

A critical aspect of elder law planning to pay for nursing home costs or other long-term care options involves consideration of resources that are exempt from calculations of eligibility for Medical Assistance (“MA” as it is known in Pennsylvania, or “Medicaid” as more universally known).  The process of qualifying for Medicaid while preserving exempt resources can be a very productive process to preserve assets for loved ones while obtaining MA funding for nursing home/long-term care costs.

 

The exclusion of exempt resources from MA eligibility involves steps to preserve pre-existing real estate and personal property, as well as purchasing exempt resources.  The first step in this process is identifying existing and potential exempt resources, followed by taking steps to preserve those that already exist and using excess resources, that could disqualify an individual for Medicaid, to purchase exempt resources.

 

The most common exempt resources are a primary residence, an automobile, burial reserves (subject to specific limits established for each county) and a burial space and marker.  In addition, excess resources beyond the MA limits can be used to purchase exempt resources or to spend down those resources for items of fair market value.  For example, improvements to the home to make life easier for a community spouse are frequently utilized, as are necessary repairs to that home.  Additionally, existing debts may be repaid, taxes can be pre-paid, medical care can be obtained, and legal fees in creating eligibility for MA can be expended. It is important to keep records documenting the spend down of resources. Significantly, while the technical resource limits for Medical Assistance are quite low, a variety of Medicaid planning tools can provide substantial additional resources for a community spouse through identifying and establishing a Community Spouse Resource Allowance (CSRA) and a Minimum Monthly Needs Allowance (MMNA).  These processes are explained in further articles on our website.  Moreover, even where a nursing home resident is unmarried additional techniques can be used to preserve resources.  These techniques are the subject of other articles in this series and are available on our website.

 

We look forward to working with your family to develop the best plan for Medicaid to pay for nursing home or long-term care for a family member, while preserving as many resources as possible for your family while addressing the full elder law needs attendant to you family’s situation.  Please reach out to our experienced and capable Estates and Trusts Department via the “Contact Us” link on our website to schedule an appointment.