The decision to move a spouse into a nursing home is one many couples have to face. Taking the time to prepare in advance can help alleviate some of the stress and uncertainty that comes with this process. Here’s an overview of the details regarding nursing homes and other long term care options:
Will we lose all of our assets? How will I be able to live?
Many spouses come into our office with these questions. We even had an elderly woman who was leaving our office to interview for retail clerking jobs in order to support herself after her husband moved to a nursing home.
No, you will not lose all of your assets.
Nursing homes are costly. For example, my mother is paying $8,000 per month. Paying at this rate rapidly depletes the life savings of an elderly couple, leaving the spouse at home with nothing to live on.
Spousal Impoverishment Protection Law: In 1988, Congress enacted provisions to prevent “spousal impoverishment;” that is, leaving the spouse at home with little or no income or resources. These provisions help ensure that this situation will not occur and that community spouses are able to live out their lives with independence and dignity.
Definition of Assets
Exempt Assets: There are certain assets that are exempt and may be kept by the spouse at home. Those assets are: the home, one car and prepaid funerals.
Countable Assets: All other assets are countable, whether owned by the husband or wife or held jointly. This includes checking accounts, savings accounts, stocks, bonds, CDs, mutual funds, revocable trusts, cash value of life insurance policies, IRAs and real estate other than the home.
Under the Spousal Impoverishment Protection Law, the spouse at home gets to keep half of all countable assets, up to a maximum of $119,220 in 2016, but not less than $24,000.
Income
In addition to assets, the spouse at home gets to keep his/her own income. If the spouse at home has less income than $2,980.50 per month, he/she will also keep part of the nursing home spouse’s income up to a maximum of $2,980.50 per month.
Example: Ellen can no longer care for her husband and he has been admitted to a nursing home. They have $200,000 in countable assets. Ellen will be able to keep $100,000 of the assets, in addition to their home, one car and prepaid funerals for Ellen and her husband.
Ellen and her husband are both on social security with no other source of income other than from their investments. Ellen receives $1,500 from social security and her husband receives $1,600 from social security. Ellen will be able to keep her own income and $1,480.50 of her husband’s income, so that her total monthly income will be $2,890.50.
Need guidance on planning for situations like these? Give us a call at (515) 298-8850