If your spouse is in a nursing home or at heightened risk for needing such care in the future, special planning measures should be taken. Those measures include dealing with what happens if you, the healthy, so called “community spouse” pass away first. In that case, the spouse in the nursing home may become ineligible for Medicaid.

In order to qualify for Medicaid, the countable nonexempt assets of a Pennsylvania nursing home resident must shrink down to either $8,000 or $2,400. Careful planning can often allow the resident’s spouse to keep all or most of these at-risk assets. However, if you pass away first and you leave those assets to your spouse in the nursing home, he or she will suddenly be over Medicaid’s asset limit.

You can write a will that disinherits your spouse. But most if not all states, including Pennsylvania, have a law that allows your spouse to claim a portion of your estate regardless of what your will says. This is called the spousal elective share. In Pennsylvania, this is essentially one-third of all your assets, whether passing through or outside your will, except for life insurance and IRA. The spousal elective share also applies to assets you gave away during your marriage without your spouse’s joinder. That is why when only one spouse owns real estate that he or she wants to transfer, the other spouse must also sign the Deed.

Your spouse, can disclaim his or her elective share, but if a Medicaid recipient disclaims the inheritance, he or she is treated as if it’s received and then gifted. It’s therefore considered an uncompensated transfer of assets that incurs a period of Medicaid ineligibility. To avoid this, the community spouse will most likely need a will that addresses this issue. The preferred option is for you to create a will that leaves your spouse exactly the amount of the elective share.

If you or your spouse are at heightened risk for requiring long-term nursing home care in the future, contact the attorneys at Vasiliadis Pappas Associates. We can help.

Contact Vasiliadis Pappas Associates for assistance if you or a loved one encounters this situation.