Elder and Disability Law Planning & Strategies

     Member-National Academy of Elder Law Attorneys, Inc.                                  www.texaselderlawattorney.com

Richard M. Barron Attorney at Law 209 E. Main St. Whitesboro, Tx. 76273 903-564-3663 or 940-612-3663 [email protected]

August, 2004

MEDICAID SPEND-DOWN CHECKLIST


There is a great deal of confusion regarding the spend-down of assets for Medicaid qualification.

For a single person, who can only keep $2,000 in countable assets in Texas, that individual may find him or herself wondering what the money can be spent on without causing any Medicaid disqualification.

Similarly, for a married couple, the rules are even more complex. The community spouse, (i.e. the at-home spouse) may generally keep roughly one-half of the coupleís assets up to a maximum of about $92,760.00. Depending upon their resources, again the couple may have substantial amount of money which needs to be spent before the nursing home spouse qualifies for Medicaid.

That is often where the confusion begins. Thatís because there is so much misinformation about what kinds of things the money can be spent for. For that reason, we have put together the following checklist to help people better understand the law.... and where the money can legally be spent.

For someone who is pursuing Medicaid eligibility, following are the types of spend-down items, in no particular order, which should be considered:

1. Purchase pre-paid funeral plans. The rules regarding funerals differs so you should only deal with a funeral home knowledgeable in this type of planning.


2. Purchase a new car. It is perfectly acceptable to purchase a new car. The community spouse may even do this and have the entire purchase price come out of the nursing home spouseís spend-down.


3. Payment of nursing home expenses. Of course, nursing home expenses and other healthcare costs can be paid as part of a spend-down.


4. Purchase of a new home. Since the home is an exempt asset, in some instances purchase of a new home makes sense from a Medicaid planning stand-point.


5. Make home improvements. Home improvements are often an excellent use of funds in a Medicaid spend-down. For instance, the community spouse might fix the roof, get a new air conditioning system, new carpeting, new furniture, etc. The intention here is to fix the house up so that, hopefully, no other home repairs will need to be done during the lifetime of either spouse. That is especially important since, in many cases, the community spouse will have to spend down one-half of his or her assets and may no longer have the resources necessary for large lump sum expenditures which may occur later.


6. Buy household goods or personal effects. Once again the intention is to have the community spouse get the types of  things which are needed to keep the household running without major expenditures down the road.


7. Debt repayment. The key here is to make sure that the debts are repaid only after the Medicaid snapshot has been established. In other words, it would be disastrous to pay down a large amount of debt before there has been a snapshot. Once the snapshot is in force, then the entire debt repayment can count against the assets of the nursing home spouse. If done too soon, however, the debt repayment would only go one-half against the assets of the nursing home spouse and one-half against the assets of the community spouse.


8. Vacation. This can be a good idea for the community spouse at a time when there has been a long struggle to keep a loved one at home. The community spouse may be exhausted and a well-deserved vacation could be rejuvenating. Believe it or not, the entire cost of that vacation can come out of the nursing home spouseís spend-down.

These are, of course, not the only appropriate items for a spend-down. There are other expenses which would also qualify. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value.

Also, donít let anyone tell you that anything spent must be done solely for the benefit of the nursing home spouse. On the contrary, virtually anything that benefits the community spouse will also benefit the nursing home spouse.

Finally, keep in mind that while some of these spend-down strategies will not work as well for a single person qualifying for Medicaid, there are other strategies that can work equally well, no matter whether you are dealing with a single person or a married couple. Consult an experienced elder law attorney for guidance.

We have included on the back of this month newsletter a Family checklist. If you need a personal Inventory, please call, write or stop by.

Free In-Service Training Available:

The Law Firm offers free in-service training on topics related to:

  • Division of Assets

  • Medicaid Planning

  • Guardianship

  • Powers of Attorney

  • Other Elder Law Issues

  • This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified attorney.

    Elder and Disability Law Planning & Strategies is made available and published as a service of Richard M. Barron, Attorney At Law, 209 East Main Street, Whitesboro, Texas 76273, 903-564-3663.

    Richard M. Barron, Attorney at Law encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Richard M. Barron. If you are interested in a free subscription to the Elder and Disability Law Planning & Strategies, then please e-mail us at [email protected]  or call us at 903-564-3663, or fax us at 903-564-5562.

     



    FAMILY CHECKLIST

    The most loving gift to oneís family is to put your affairs in order before a disaster or medical emergency. To assist in providing that gift, we have complied the following list.

    The information and documents you should have prepared:

    ∙ All bank accounts, account numbers and types of accounts and the location of banks.


    ∙ Insurance Company, policy number, beneficiary as stated on the policies and type of insurance (health, life, long term, automobile, etc).


    ∙ Deed and titles to ALL property.


    ∙ Loan/Lien information, who holds them and if there are any death provisions.


    ∙ Social Security and Medicare numbers.


    ∙ Military history, affiliations and papers (including discharge papers).


    ∙ Up-to-date will in a safe place (inform family where the will is located).


    ∙ Living Will or other Advanced Directive.


    ∙ Durable Power of Attorney.


    ∙ Instructions for funeral services and burial (if arrangements have been secured, name and location of funeral home).

    If you need an outline for a personal inventory of the above items we will be glad to provide you with one. Please call, write, or stop by our office at Richard M. Barron, Attorney At Law, 209 East Main Street, Whitesboro, Texas, 76273, 903-564-3663 or 940-612-3663.

    E-mail Richard M. Barron @
    [email protected]

     

                     


    Legal Disclaimer

    This information has been provided for informational purposes only.  It does not constitute legal advice.  The receipt of this information does not establish an attorney-client privilege.  Proper legal advice can only be given upon consideration of all the relevant facts and the law.  Therefore, you should not act upon any information contained herein without seeking appropriate legal counsel.  

     

    Richard M. Barron

    Attorney at Law

    209 E. Main Street

    Whitesboro, Texas 76273

    903-564-3663, 940 612-3663, 800-939-9093

    Fax - 903-564-5562

    Email- [email protected]

    Not certified by the Texas Board of Legal Specialization

    Licensed to Practice Law by the Supreme Court of Texas