Retitling Assets to Healthy Spouse to Qualify for Medicaid

            It’s something I have written about in past blog posts but just last week we received a call from Mary on this exact issue.  Her husband, George, has Alzheimer’s and now needs care at home.  She is concerned that as his condition worsens it won’t be long before he needs nursing home care.  At $120,000 a year she doesn’t have sufficient income to pay that kind of expense.

             A few years ago Mary spoke with her attorney about planning for the possibility of needing Medicaid for George.  She wanted to insure that her primary residence and shore home would be protected, that they would not need to be sold and spent down for care.  Her attorney told her not to worry.  “We’ll transfer George’s interest in the homes to you.”  So that’s what they did.

             “Unfortunately”, I told Mary, “that is not going to protect the shore property.” That’s because under  Medicaid’s division of asset rules, while Mary can keep their primary residence, all other assets, including the second home, are considered “countable” assets.  Mary is entitled to keep ½ of those assets but only up to a maximum of $119,220 (the limit in 2015).

             It’s a common mistake I still see people make all the time.  You can’t simply shift everything over to the healthy spouse in order to get the ill spouse’s assets under the $2000 limit to qualify for Medicaid.  So, where does that leave Mary?  Next week I’ll share that with you.