Asset Protection from Spend Down

Aler Stallings

You may not be familiar with the nursing home spend down, but if you have a loved one in need of nursing home care, you’ll learn about it quickly.

Before getting help from Medicaid, a person needing the nursing home in Ohio must spend assets all the way down to $2,000. Without planning, this often means impoverishing the healthy spouse and leaving little to their heirs. If you find yourself spending down in order to meet Medicaid requirements, contact AlerStallings immediately. Even in an emergency situation, we can help protect assets. It’s never too late. 

How Much Can a Healthy Spouse Keep?

Medicaid spend down rules apply when an individual or a couple is attempting to get help from Ohio Medicaid. If we’re dealing with a couple, resources must be reduced by half, but there is a cap. The most a healthy spouse can currently keep, known as the Community Spouse Resource Allowance, is $126,420 in 2019.     

Protecting Assets

Are you looking to prevent your assets from being used to pay for nursing home care costs?  Then you must take action.  Creating an Asset Protection Trust is a much less expensive option than long-term care insurance. An Asset Protection Trust is an irrevocable trust that holds assets to protect them from future nursing home costs. It must have a trustee, which is often an adult child. To make sure Medicaid will not be able to force the assets you include in the trust to be spent, you must set it up and transfer assets into the trust at least five years prior to entering a nursing home. This period of time is called the five-year look back and has been in place since 2006. 

Avoiding the Big Mistake

People often make the mistake of giving assets away to family members instead of creating an Asset Protection Trust. This mistake can create unnecessary tax consequences that far exceed the cost of setting up the trust.  Other problems arise when the child is sued or gets divorced while owning a parent’s home or other assets.  That could result in the home or other assets being lost.  That’s why a much better planning option is an Asset Protection Trust. In addition to protecting the assets from the nursing home and the children’s problems, this type of trust can be a valuable part of your estate plan, helping to avoid the expensive and time-consuming probate process at your passing.

If you want to learn more about how an Asset Protection Trust can help you or your family, contact AlerStallings today.