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What if you or your spouse
unexpectedly become disabled and must go into a nursing home?
Nursing home costs can easily run $4,000 a month or more. Will
your life-time accumulations be lost to pay nursing home bills?
Will your spouse be left destitute? The answer is no, if
proper planning takes place. However, medical assistance myths
are like dandelions—they are everywhere and keep coming back
despiteall attempts to kill them. Let us take a look at two of
the most common myths.
Myth
#1
If I go to
the nursing home, my spouse
and I must give up our home to qualify for medical
assistance
nursing home benefits.
Fortunately, the law
permits the at-home spouse to continue to own certain property
while the nursing home resident receives medical assistance. The
at-home spouse can own the homestead, including an unlimited
number of connected farm acres; all of the furniture, clothing,
jewelry and household goods; and one-half of the other assets of
the couple, up to a maximum of $89,280. If the other assets are
worth $25,247 or less, the at-home spouse can keep the entire
amount without affecting medical assistance eligibility.
For example, assume a
husband and wife own the following property: home in town worth
$100,000, household goods worth $10,000, one car worth $15,000,
and bank accounts totaling $150,000. The husband becomes
disabled and goes to the nursing home. The wife can
continue to own the home, all of the furniture and household
goods, the car, and $75,000 of the bank accounts.
Without planning, the
non-exempt $75,000 would go for nursing home bills until almost
depleted before the husband would qualify for medical
assistance.
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With proper planning, a
significant portion of the couple’s estate can be saved from
nursing home expenses. One strategy is to apply the non-exempt
assets to exempt assets. In our example, the non-exempt funds could
be applied to the home mortgage or be used to make repairs on the
home. The funds can also be used to pay off any loan on the car or
to buy a prepaid funeral. This would reduce the non-exempt assets.
Another common strategy is
to transfer property to family members. However, property transfers
may result in a period of medical assistance disqualification under
the "look back" rule. Property transfers require very
careful planning to avoid costly mistakes.
Myth #2
If my spouse is in the
nursing home, my
income must be
used to pay for it.
None of the income of the
at-home spouse is considered to be available to a spouse on medical
assistance in a nursing home. In fact, the at-home spouse is allowed
a monthly minimum income that can reduce the income of the nursing
home spouse. If the at-home spouse’s monthly income is less than
$1,493, plus a shelter allowance, that income can be supplemented by
the income of the nursing home spouse, up to that limit, rather than
having that income go to nursing home bills.
As you can see, medical
assistance planning is a complex area governed by federal, state,
and county rules and regulations. We work with clients in planning
their estates, including planning which minimizes the impact of
nursing home expenses.
Christopher A. Kleiman is
an associate with Kraft, Walser, Hettig & Honsey
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Tips for Parents
By Don Walser
Minnesota has a law called the Safety Responsibility
Act. When someone is driving your vehicle, with your consent, the driver is your
"agent". This means that if the driver causes an accident, you are
liable for the injuries or losses.
If you get a car for a young driver (16 or over)
in your family, talk to your insurance agent before you register the car in your
name. You may wish to protect yourself, and your assets, from risk by
registering the vehicle in the young driver’s name and obtaining a separate
insurance policy for that vehicle.
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