• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Unsworth LaPlante, PLLC

Vermont Estate Planning Attorneys

Vermont: (802) 879-7133

Attend A Free Workshop
  • Home
  • Our Firm
    • About Our Firm
    • Meet Our Team
    • What to Expect When Working with Us
  • Services
    • Estate Planning
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid Planning & Elder Law
    • Pet Planning
    • Special Needs Planning
    • Trust Administration
    • Young Families Planning
  • Resources
    • Articles
    • Elder Law Reports
    • Elder Law Resources
      • Burlington
      • Montpelier
      • Rutland
      • St. Johnsbury
      • White River Junction
    • Estate And Gift Tax Figures
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Elder Law
        • In-Home Elder Care
        • Medicaid
        • Planning for Long-Term Care
      • Estate Planning
        • Business Succession Planning
        • Estate and Gift Tax
        • Estate Planning for Blended Families
        • Estate Planning for Parents
        • FAQs for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Taxes on Inheritances in Vermont
      • Incapacity Planning
      • IRA & Retirement Planning
      • Gift, Estate, and Inheritance Taxes
      • Legacy Wealth Planning
      • Philanthropy and Estate Planning
      • Pet Planning
      • Revocable Living Trust
      • Special Needs Planning
      • Trust Administration
      • Trusts
      • Wills
    • Is Your Estate Plan Outdated?
    • Medicaid Resources
      • Medicaid Analysis Worksheet
      • Medicaid Guide
      • Vermont Medicaid
    • Newsletters
    • Presentations
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
    • SECURE Act
    • Top Estate Planning Techniques
  • Webinars/Seminars
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact
Home » Overview of Medicaid Spouse Allowances

Overview of Medicaid Spouse Allowances

November 4, 2020 by Stephen Unsworth

community spouse resource allowanceAs you go through life, you find that people that are in advantageous positions are the individuals that were able to see over the horizon. They take the right actions at the right times, and more often than not, they are rewarded when the future becomes the present.

This is a dynamic that applies to long-term care and the costs that go along with it. Nobody wants to think about a time when they may not be able to handle their own day-to-day needs, but it happens to most of us.

Seven out of 10 seniors will need some type of living assistance, and more than one third of elders will eventually reside in nursing homes.

Some people hear this type of thing and they ignore it as they hope for the best. Others take it seriously, and they look for solutions.

Medicaid Planning

You can brace yourself for these potentially devastating expenses if you position your assets with Medicaid eligibility in mind. This program will pay for a stay in a nursing home, but Medicare does not pay for any type of custodial care.

Since Medicaid is a need-based program, there is a $2000 asset limit, but some types of property are not counted. Your home is not looked upon as a countable asset for Medicaid eligibility purposes, but there is a $595,000 equity limit in Vermont this year.

The program is not concerned about your personal belongings and the items that you have around the house, and they do not count your wedding and engagement ring and heirloom jewelry.

One motor vehicle is permitted, and Medicaid has no problem with any amount of term life insurance, because it has no cash value. There is a $1500 limit on whole life insurance, and you can have this amount set aside to help cover your burial or cremation expenses.

Healthy Spouse Allowances

Now that we have provided the necessary background information, we can focus on the healthy spouse. If you are married and you require nursing home care while your spouse can still live at home, your spouse would be able to take advantage of certain allowances.

One of them is the Community Spouse Resource Allowance, which gives the healthy spouse the right to keep half of the community assets that are countable.

This can sound quite encouraging, but there is a limit of $128,640 at this time. There are annual inflation adjustments, so the figure rises a bit each year.

Some states have a minimum allowance that gives the healthy spouse the right to keep a certain amount even if it is more than half of the shared assets. We do not have that provision here in Vermont.

Almost all of the income that is brought in by a person that is enrolled in the Medicaid program has to go toward the cost of the care that is being received. However, there is an exception if the independent spouse is relying on that income.

The community spouse can receive a Monthly Maintenance Needs Allowance that maxes out at $3216 this year. There is also a minimum allowance of $2155.00.

Spending Down Assets

People engage in a process called a “spend down” to divest themselves of assets so they can qualify for Medicaid. Some folks actually spend money more freely, but for most, the idea is to give their children inheritances in advance.

This is a sound strategy, but you have to complete the gift giving at least 60 months before you apply. The penalty for violating this look back rule is a period of ineligibility.

How long would you have to wait? It depends on the amount of the gifts. For example, if you gave away $250,000, and that amount would pay for two years of care, your eligibility would be delayed by two years.

Take Action Today!

If you are ready to discuss a nursing home asset protection strategy with a licensed elder law attorney, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 802-879-7133.

 

 

  • Author
  • Recent Posts
Stephen Unsworth
Stephen Unsworth
Stephen A. Unsworth is admitted to practice in both Vermont and Maine, and has more than 30 years of experience in estate planning and business law. His mission is to provide quality estate planning services, including assistance with Living Trusts, Wills, Medicaid Planning, Probate, Trust Administration, Powers of Attorney, Special Needs Planning, and Family Limited Partnerships.
Stephen Unsworth
Latest posts by Stephen Unsworth (see all)
  • Does My 401(k) Account Count for Medicaid Eligibility? - October 20, 2022
  • Senior Care Options - October 18, 2022
  • Is an Oral Will Valid in Vermont? - October 13, 2022

Filed Under: Uncategorized Tagged With: Elder Law, nursing home asset protection, Medicaid Community Spouse Resource Allowance, Monthly Maintenance Needs Allowance

Other Articles You May Find Useful

Essex Junction elder law attorneys
What You Need to Know about Elder Abuse
Essex Junction Medicaid planning attorneys
How to Apply for Senior Medicaid in Vermont
Planning for the “Silver Tsunami”
Discharge of Indebtedness Income and Student Loan Forgiveness
More than Just Salad Dressing: The Ongoing Saga of Newman’s Own Foundation
Essex Junction Medicaid planning attorneys
Does My 401(k) Account Count for Medicaid Eligibility?

Primary Sidebar

Elder Law and Medicaid Planning Attorneys

Unsworth LaPlante, PLC

DOWNLOAD OUR FREE ESTATE PLANNING WORKSHEET

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

Blog Subscription

Sign up to Unsworth LaPlante's estate planning blog to receive all the latest news and updates.

  • This field is for validation purposes and should be left unchanged.

Essex Junction, VT

26 Railroad Ave
Essex Junction, VT 05452
United States (US)
Phone: (802) 879-7133
Fax: (802) 879-0408

Map

unsworth_sidbr_map

Office Hours

Monday8:00 AM - 4:00 PM
Tuesday8:00 AM - 4:00 PM
Wednesday8:00 AM - 4:00 PM
Thursday8:00 AM - 4:00 PM

Footer

footer-logo
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

The information on this Vermont Attorneys & Lawyers / Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

American Academy of Estate Planning Attorneys, Inc. Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc.