What Happens to a Medicaid Recipient if the Health Spouse Dies First in Michigan?

Many of my Medicaid clients are married couples, where one spouse will be in the nursing home (called the “institutionalized spouse”) and one spouse, healthier, and living at home (called the “community spouse”).

When applying for Michigan Nursing Home Medicaid for a married couple, special planning needs to be done to protect the assets from nursing home or Medicaid spend down so that the community spouse is not completely impoverished.

Michigan Medicaid Asset Protection for Married Couples

Our elder law office with locations in Brighton, Bloomfield Hills, Livonia and Novi regularly protects almost all the assets for that community spouse and gets the spouse in the nursing qualified for Medicaid,  even if the family has $100k, $250k or more in assets.

But that’s just the first step of getting Medicaid qualified.

What happens if the community spouse, the “healthy” one, passes away first?

In Michigan, when one spouse is in a nursing home and applying for Medicaid, planning has to take into account the possibility that the spouse who is not in the nursing home may pass away first. This is because the community spouse’s death may make the spouse in the nursing home ineligible for Medicaid if proper legal planning is not done to ensure this doesn’t happen.

In order to qualify for Medicaid, a nursing home resident can have only a $2,000 in assets. However, if that community spouse passes away first and leaves those assets to the nursing home resident, the resident suddenly would be over Medicaid’s asset limit.  That’s a problem

Protection Against Loss of Medicaid Benefits

To protect against the lost of Medicaid benefits by the the community spouse passing away first, the community spouse should update their estate plan with a certified elder law attorney well versed in Medicaid planning and elder law.

That estate plan in our office would involve updating the will and trust, so as to provide for the spouse in the nursing home with a supplemental needs trust if necessary, then when the spouse in the nursing home passes away, the assets would flow to the kids or other beneficiaries.  The net effect is continuing the Medicaid benefits for the nursing home spouse, having a pot of resources to pay for additional services or care to improve quality of life, then the remaining assets going to the other beneficiaries upon death.

Expert Guidance from a Certified Elder Law Attorney

It’s important to seek out advice from a CELA (Certified Elder Law Attorney).  Any attorney can say they do elder law, only a Certified Elder Law Attorney has proven they are experts in elder law.

If you’d like help with your family’s Michigan Medicaid qualification needs, give us a call at (888) 390-4360, we serve families in Livingston, Oakland, Wayne and Macomb counties from our elder law attorney offices in Brighton, Livonia, Novi and Bloomfield Hills.

Click here to learn more: Michigan Medicaid Planning

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