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What Happens if a Spouse Passes Away During the Medicaid Application Process?

For many Americans, the costs of a nursing home or assisted living facility for loved ones are out of reach due to limited assets and income levels. For these individuals, Medicaid serves as an enormously beneficial social safety net that helps to pay for this level of care. 

Yet, prior to turning to this federal program for assistance in paying for the care provided in a nursing home or assisted living facility, there are some important considerations to factor in, such as what happens if one’s spouse passes away during the Medicaid application process.

To qualify for Medicaid, a resident of a nursing home must posses a very limited amount of assets. A couple may be able to maintain these assets through careful planning prior to applying for Medicaid, however, allowing for a spouse living outside of the nursing home to maintain the assets. However, even when careful planning has taken place, if the spouse not in the nursing home (known as the community spouse) dies, the spouse in the nursing home could suddenly be above Medicaid’s asset limit and therefore become ineligible for assistance.

If this occurs, the spouse in the nursing home could disclaim his or her share of the assets, but Medicaid still considers disclaiming of one’s inheritance as an uncompensated transfer of assets. As a result, the spouse may continue to be ineligible to receive Medicaid assistance for a period of time.

To avoid any periods of ineligibility, the community spouse may need to specify this issue within a provision of his or her will. For example, the community spouse could leave the nursing home spouse the exact amount of elective share that person could maintain to still qualify for Medicaid. Alternatively, a special trust, such as a special needs trust, could be created for the spouse in care.

To determine the best course of action for both your and your spouse concerning Medicaid planning, speak with an experienced Florida attorney at the Charles Law Offices.

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