or $1,822 from all sources. This figure may be increased
if you have household expenses exceeding certain standards.
For instance, if the well spouse earns $2,000 per
month and the ill spouse earns $600, the well spouse
will keep all $2,000, but the ill spouse must contribute
his or her income towards the cost of living (if at home)
and health care expenses. This is called “participation”.
If the well spouse earns $1,000 and the ill spouse
earns $1,000, the ill spouse will contribute $822 per
month to the well spouse, bringing the well spouse’s
income to $1,822 per month. The ill spouse will then
contribute the balance towards care costs and may retain
some income if they are in a nursing home or the
COPES home care program to cover living expenses,
but if living in assisted living on COPES, must pay all
extra income to the adult family home or living facility.
DSHS pays the balance of the costs. There is no penalty
connected with transferring funds from one spouse to
another, but if you transfer assets to a child, draconian
penalties await both spouses. Today, the gift penalty
period is no longer imposed at the time of the gift, but
at the time of institutionalization, which could be years
later. There are ways to minimize penalties in respect of
transfers to children, but because of the horrible consequences
of a carelessly planned transfer, no one should
consider doing so without expert advice. Transfers from
a well spouse to a non spouse following placement of
an ill spouse on Medicaid results in penalties only to
the well spouse, and should not affect care for the ill
spouse. Transfers made prior to Medicaid eligibility affects
both.
DSHS has become extremely aggressive in collecting
against Medicaid recipients’ estates and, in some instances,
will place liens on your home even before
you die. Recovery is limited to assets held by the disabled
spouse at the time of death, so an interspousal
transfer must be completed to prevent DSHS from taking
your home or exempt assets upon your demise.
Failure to transfer the home will spell disaster for your
children. An effective power of Attorney granting
power to transfer assets to your spouse or children is
critical. Internet, stationery or do it yourself forms do
not contain adequate powers to effect these transfers
and may force you into a guardianship proceeding or
contribute to the practical impoverishment of you and
your loved ones.
With a proper Durable Power, people can avoid or
minimize the qualification spend down. Without this
document, you can anticipate significant difficulties
with Medicaid in helping you with the staggering costs
of long-term care. You must be extremely careful who
you grant this power to, however. Relatives with powers
of attorney can help save your assets, but they can
also steal them. Only give this power to people you trust
with your life.
Strategies exist to help people retain their life savings
and home; however, the effectiveness depends upon
estate size, the planning undertaken prior to illness, and
the skills of the attorney you are working with to maximize
exemptions. Find and consult an attorney familiar
with these complex laws before you take action and be
sure your Durable Power stays updated. If you can afford
it and are healthy, the purchase of long-term care
insurance should always be considered, and can save
you from the need to access Medicaid, or provide you
a significant ‘safe harbor’ should you need Medicaid to
help with the cost of care by providing an exempt credit
for your policy’s value when that law is enacted.
When you need a medical specialist, the best way to
find that doctor is to ask other physicians. Finding an
Elder Law attorney is no different. Ask your lawyer, doctor
or accountant for a referral, or ask lawyers or accountants
you know for assistance. With qualified help,
obtaining assistance with long-term care costs is possible,
and could save you and your loved ones significant
resources, allowing you to retire in dignity.
