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Medicaid Planning for a Married Couple

Medicaid Planning for a Married Couple: A Radio Interview of Attorney John R. Frazier by Attorney Joseph Pippen

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Attorney Pippen:             Let’s go-to attorney John Frazier. John is our Medicaid attorney, VA attorney. John gives the tip of the week, usually concerning the Medicaid or VA issue. Good morning, John.

Attorney Frazier:              Hey Joe, how are you doing today?

Attorney Pippen:             I’m doing great. So what’s the tip of the week this week, or what’s the topic you’d like to discuss?

Attorney Frazier:              Today, I’m going to talk about Medicaid planning for a married couple. And, I’m going to start out by talking about the asset limits. I think most people understand that there are financial asset limits to apply for Medicaid. So under Florida law, the spouse applying for Medicaid is allowed to have $2,000 in what are called countable assets. Those would be things like bank account money, stocks, bonds, your typical non-IRA type accounts. IRAs and 401ks are treated differently. The spouse still living in the community is allowed to have $130,380 in countable assets. If both spouses are applying for Medicaid, they’re allowed to have a combined asset limit of $3,000. As far as exempt assets are concerned, the house up to $603,000 under Florida law is exempt. If your spouse is living there, there’s no cap on the Florida Homestead. One car of any value is exempt.

So I was going to talk about three simple examples to further explain how this type of planning works. So let’s say that you have a married couple with a $700,000 house, a 10-year-old car that’s not a luxury vehicle, and $500,000 in countable assets. So what we typically do if you have one spouse applying for Medicaid, the other spouse not applying, the very first thing that we typically do is to bring the spouse applying for Medicaid to less than $2,000, by moving the countable assets over to the spouse in the community.

So in that example, and let’s say that the spouse applying for Medicaid has $1,000 a month in monthly income. Spouse in the community has $3,000 a month in income. So after you move, say $499,000 over to the community spouse’s name, we could use a strategy called spousal refusal. And, despite the fact that she’s well over her $130,380 asset limit, the Medicaid applicant would be put on Medicaid, and would only have to pay a portion of the monthly income, the $1,000, and the average cost of care is about $9,500 per month. So in that example, the family would save about $8,000 a month or so.

In the next example, let’s say that you have the same fact pattern, but $150,000 in countable assets. So, what you would do in a situation like that is say, move $149,000 over into the wife’s name, and then go out and buy, for example, a $25,000 new car. That would bring the wife below the countable asset limit, and he would also, the Medicaid applicant would be qualified for Medicaid. Once again, with the same financial responsibility each month, a little bit less than $1,000 per month.

In the third example on Medicaid planning for a married couple, let’s say you have the same fact pattern, but they only have $50,000 in countable assets. What you would do in a situation like that is just move the $49,000 over into the wife’s name, and then the person would be qualified for Medicaid. The State of Florida says if both spouses are below their combined asset limit when they apply for Medicaid, they’re supposed to have a year, allow a year, to bring the Medicaid applicant to less than $2,000. But some of our DCF caseworkers say that you have to bring the Medicaid applicant to less than $2,000 before the caseworker will approve the case. Technically, that’s not correct, so what we do as a first step is just bring the Medicaid applicant to less than $2,000 in all of our cases. So, that’s a basic summary of Medicaid planning for married couples here in Florida.

Attorney Pippen:             All right. So as the listeners could take from that conversation, if you have a loved one or a friend that’s going into a nursing home that has some assets, and thinking they have to spend down to qualify for Medicaid, there are certainly ways that a Medicaid attorney like John can move assets around a little bit, have them fall into an exempt category and qualify for Medicaid.

John, we’re right at the bottom of the hour so give us your contact information to how people can contact you directly.

Attorney Frazier:              The office number is (727) 586-3306, extension 104. My cell phone is (727) 748-5374. And my email address is John@attypip.com.

Attorney Pippen:             John, thank you so much. Hope you have a great Sunday, be safe.

Attorney Frazier:              Okay, you too. Thank you.

Want to learn more about “spousal refusal” as a Medicaid Planning strategy for married couples we have a blog post just on that topic.

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