To the Community Spouse
You can save everything by legal spend down and the Community Spouse Sole Benefit Trust. Before we get into that let’s explore the Medicaid rules of the spouse of the nursing home resident.
You Will Need an Elder Law Attorney
You will need an experienced Elder Law attorney. You may judge the attorney by her/his professional associations. We say the attorney must be a member of the member of the State Bar Elder Law section. In Michigan it is the “Elder Law and Disability Rights” section. The attorney must be a member of the National Academy of Elder Law Attorneys. Finally it is best if the attorney is a Certified Elder Law Attorney. You may visit the website https://www.nelf.org/attorney-directory-search to find one.
What assets does Medicaid allow the Community Spouse?
Medicaid has “countable assets” and “exempt assets.” “Exempt assets” are those that need not be sold, such as your home and your car. Countable Assets are those that are cash or reduced to cash in 30 days. Medicaid allows the Community Spouse spouse half of the “countable” assets up to a limit of $162,660 (2026). For example, If a couple has $250,000 in total savings, the Community Spouse is allowed to keep half or $125,000. For this couple that is the maximum “Community Spouse Resource Allowance” (CSRA). So if a couple has $300,000 the community spouse is allowed is $150,000. Again, the total of countable assets over the CSRA must be spent or protected.
On what can I spend the amount over the CSRA?
Anything. Pay off bills, buy a new car, update your home, get a new kitchen – anything. You will still be allowed the CSRA. Remember you must pay the nursing home until your application is filed. If approved, spend no more. If not approved appeal or continue to spend until you only have the CSRA in “countable assets.”
Court Order Option
You may hire a lawyer and petition the probate court for an order awarding you a greater share of assets than the “CSRA.” The judge could award you all or part of the “excess assets.” The court process is written into the federal Medicaid law and may be undertaken only when there is a Medicaid application. You must hire an elder law attorney since other lawyers don’t know about the law and probate courts don’t see these petitions very often. Judges don’t know what to make of them and the attorney has to explain the law. There is no guarantee the judge will grant your petition. The Order from the court must be presented to the Medicaid Department and the department may appeal the Order.
Annuity Option
You may take the “excess assets” over your CSRA and purchase an irrevocable single premium immediate annuity. You must cash in investments, CDs etc. and use the cash to buy the annuity. The annuity must be “immediate” and “irrevocable.” It will pay you a fixed monthly income for your life expectancy according to Medicaid tables. . Your spouse’s income will go to the nursing home instead of to you. If you have an emergency you cannot get more money from the annuity unless you sell it at a great discount.
The Community Spouse Sole Benefit trust enables you to save everything you have.
By the case Hegadorn v. DHS The Michigan Michigan Supreme Court ruled that the Michigan Department of Health and Human Services must recognize that the Community Spouse. may put all assets, which would otherwise be spent paying for a nursing home in a
Conclusion
You need not fear financial ruin from nursing home bills. You do not have to give away your property years in advance in contemplation of a long term stay in a nursing home. In fact the opposite is true. You can act after your spouse has entered the nursing home. As a community spouse you have special rights. Give us a call and we will refer you to some of the best Elder Law attorneys in Michigan. Just give us a call at 248-356-3500.
All the best,
Jim