Long Term Care Planning for Married Couples

If one spouse has to enter a nursing home, the healthy spouse is allowed to keep $99,540.00, the home and one car. The nursing home spouse gets to keep $2,500 ($2,000 in Massachusetts). The balance of the marital estate would have to be spent down on the ill spouse's nursing home costs. Some of the money could be spent down by prepaying funeral expenses of both spouses, purchasing a car or house (if they don't already own one) and/or purchasing a Medicaid Qualifying Annuity.

A Medicaid Qualifying Annuity is essentially the conversion of excess assets that should be spent down, to income for the healthy spouse. The healthy spouse's income is not countable when determining the nursing home spouse's eligibility for medical assistance. The annuity must be irrevocable, non-transferable and non-assignable for it to be qualified.