Change Spouse’s Will & Retitle Assets to Protect Life Savings

Once a spouse qualifies for Medicaid, it’s important for the other spouse to change the Will and retitle assets making sure to leave the spouse in the nursing home only the minimum required by law.

If that’s not done, and if the spouse living in the marital home dies and leaves all of what is owned to the spouse in the nursing home, that amount could exceed the Medicaid $8,000 limit and make the nursing home spouse ineligible for Medicaid.

Now you may be tempted to take the spouse in the nursing home out of your Will so Medicaid doesn’t get anything.  However, Pennsylvania law permits the surviving spouse to claim 1/3 of the estate even if the spouse was taken out of the Will.  Therefore, you can have your lawyer change the Will and restrict the amount that goes to your spouse to the legal required minimum, 1/3, and have that 1/3 go into a support trust.  When the spouse in the nursing home dies, and Medicaid is reimbursed for what it paid, whatever is left in the support trust can then go to surviving beneficiaries like your children or loved ones.

Also, jointly titled assets, like life insurance, annuities, or retirement plans, that leave money to the spouse in the nursing home can also cause Medicaid ineligibility if that money exceeds the Medicaid limit of $8,000.  Therefore, once the spouse qualifies for Medicaid to pay for nursing home care, it’s important to take that spouse’s name off the jointly titled assets as the beneficiary.

And it’s not just the jointly titled assets of the spouse in the marital home that you have to worry about.  If the spouse in the nursing home owns a jointly titled asset, like life insurance, it’s important that backup beneficiaries are named on that policy.

Here’s why.  Let’s assume that spouse in the nursing home owns life insurance naming the spouse in marital home as the beneficiary.  Let’s also assume that the spouse in the marital home dies before the spouse in the nursing home.  When the spouse in the nursing home dies later, and if there’s no backup beneficiary, the life insurance proceeds will go to the estate of the spouse in the nursing home.  Medicaid can then make a claim against the life insurance proceeds for the amount it paid for nursing home care.  However, if you have a backup beneficiary in place in case the spouse in the marital home dies before the spouse in the nursing home, then the life insurance proceeds do not go into the estate of the spouse in the nursing home, and instead goes to the backup beneficiary, and Medicaid doesn’t get it.

When you change the Will and take the nursing home spouse off jointly titled assets as a beneficiary, if the spouse in the marital home dies before the spouse in the nursing home, you can limit Medicaid’s potential claim to 1/3 of the estate instead of 100% of the estate.  For example, if the Spouse in the marital home dies before the spouse in the nursing home, and the total value of the estate is $300,000, if you changed the Will and beneficiaries on jointly titled assets, then Medicaid would be limited to only $100,000 of the $300,000.  If you didn’t make the changes, then the $300,000 may be used to private pay for nursing home care, and at an average annual cost of $117,516, it won’t take long for the nursing home to completely wipe out the life savings. 

Want Peace of Mind and a Complete Evaluation of Your Case? 

Call (610) 347-5035 NOW or Click HERE to Schedule a Consultation with Chester County Pennsylvania Nursing Home & Elder Law Attorney, Michaelangelo L. Dippolito.  Click HERE to see the attorney’s background.

Not Ready to Speak to an Attorney Yet?  No Problem.

Get this FREE Book and Consumer Protection Guide, Paying for Nursing Home Care in Pennsylvania, A Consumer Protection Guide on What You Need to Know to Protect Your Legal Rights.  Here’s Some of What’s in the FREE Book and Consumer Protection Guide:

• What’s it Cost & Who’s Gonna Pay?
• 10 Moves You Can Make to Qualify for Medicaid & Protect Your Life Savings
• Critical 5 Step Process to Your Medicaid Claim for Nursing Home Care
• What You Need to Know About Lawyer Fees
• Arming Yourself with Knowledge is the First Step to a New Beginning

Still Not Ready and Want to Learn More Before You Move Forward?  No problem.

Click HERE for more information on Nursing Home & Elder Law in Pennsylvania, and remember, we’re just a phone call away at (610) 347-5035.