If your spouse is losing the ability to care for himself / herself and needs long term care, in a nursing home, assisted living facility or with home care aides, there are a lot of steps to take, like Medicaid planning and changing your estate plan. We’ve written extensively about those steps on this blog, and today I want to focus on one particular and often overlooked step: changing title to joint property.
For many people, the only way to pay for the high costs of long term care is through Medicaid. If your spouse is on Medicaid and you are not, it’s very important that you don’t own assets jointly with your spouse, for two reasons.
First, when someone is on Medicaid, they can’t have more than $2,000 worth of assets (Resources). If they have more than $2,000 in any month, they lose Medicaid. If you own property jointly with your spouse, and you die, the property passes entirely to your spouse, and he will lose Medicaid. Instead, in many cases that property could go to your children or other family members without causing your spouse to lose Medicaid.
Second, people over age 55 who receive Medicaid (called “beneficiaries”) are subject to Medicaid estate recovery. That means that when a Medicaid beneficiary dies, any property they own goes to the government, in order to repay the government for the Medicaid assistance it provided to the beneficiary. If you own property jointly with your spouse (or parent, child, sibling, etc.) on Medicaid, and your spouse dies, that joint property may become subject to Medicaid estate recovery and may have to be sold to repay the government.
If your spouse needs long term care and will go on Medicaid, it may be wise to change title to joint property. That may involve doing a new deed to your house, changing bank account ownership, designating new beneficiaries for life insurance or retirement accounts, etc.
To learn more about what to do if your spouse is going on Medicaid, call or email FriedmanLaw.