As an elder law attorney, I frequently receive calls from clients indicating that they want to protect their assets from paying for nursing home care. Generally, the earlier the schedules a consultation to discuss their planning, the more options they will have.

The options that are available to protect assets are individual to each client and we must have a meeting to thoroughly review and discuss all of your options. Some of the factors that determine the type of planning I recommend are whether I am assisting a single client or a married couple, the amount of assets they own, how they own their assets (individually, jointly, in trust, etc.), the health of the clients, whether they have any disabled children, whether they have made gifts of their assets within the last five years, whether they live with siblings and whether they will soon need nursing home care.

The following are some planning options that are available as of January, 2019. The options that I recommend are individual to each client and depend upon the factors listed above:

Reducing Excess Assets Without Penalty Prior to Date Seeking Medicaid Eligibility:

  • Purchase household and personal belongings: intent of purchase, timing of purchase and relationship of item to applicant’s needs considered;
  • Payment of existing debts (mortgage, car loan, credit card bills);
  • Prepayment of anticipated debts (real estate taxes, income taxes);
  • Payment for necessary repairs to noncountable assets;
  • Prepayment of funeral and burial expenses;
  • Open a $1,500 burial account (for community spouse and applicant)

Transfer Home to Permissible Transferees Without Penalty:

  • Spouse;
  • Caretaker child;
  • Child who is blind, disabled;
  • Sibling with equity interest and who resided in home for at least one year prior to institutionalization.

Wills With Testamentary Trusts for Married Couples:

  • For married couples, it is possible to preserve at least 50% of the married couple’s assets under the current laws if the first spouse dies without needing to apply for Medicaid benefits, requires dividing the assets as best as possible prior to death and executing the appropriate Will with Testamentary Trust;
  • Also used during Medicaid application process by community spouse (spouse at home) to protect community spouse resource allowance in the event the community spouse predeceases the spouse in the nursing home.

Single Premium Immediate Annuities:

  • Can be a valuable strategy for protecting all or a portion of a couple’s excess assets for the community spouse. An annuity is a right to receive periodic payments for life or for a term of years in return for a single premium payment;
  • Purchase of annuity is not disqualifying as long as the applicant’s spouse is the annuitant and the annuity payments are for life or for a term that is within the annuitant’s life expectancy, as verified by actuarial tables;
  • Downside is that the State must be named beneficiary upon the death of the community spouse.

Pooled Trust for Single Disabled Individuals:

  • Can use excess assets of a single disabled individual to fund a pooled trust;
  • The individual in most instances will be financially eligible for Medicaid upon funding of the pooled trust;
  • Funds in the pooled trust will be available to pay for the supplement needs of the nursing home resident that MassHealth will not pay for;
  • Payback provision in the trust for Medicaid benefits paid out during the trust beneficiary’s lifetime and trustee fees to be paid from pooled trust funds;
  • If any funds remaining after payment of MassHealth lien and Trust fees, trust beneficiary can name beneficiaries to receive remaining funds upon death.