Practice Area: Elder Law
Outcome: Saved All of Married Couples Assets
Description: 1. CRISIS PLANNING FOR MARRIED COUPLE WITH HOME AND $700,000 IN ASSETS. Both Bob and Mary are living in assisted living. It is literally a race to the nursing home. Mary wins race, is hospitalized and then is admitted to Nursing Home. Assets: Home and adjacent land; $300,000 Savings bonds value including accumulated interest $400,000 Bank accounts $200,000 Husbands IRA $ 50,000 Other investments $ 50,000 TOTAL $1,000,000 Income: Husband’s monthly income is only $ 900 Wife’s monthly income is $3,300 Wife’s nursing home monthly cost of care $7,000 Husband’s assisted living monthly cost $4,500 RESULT WITH NO PLANNING Bob would be left with home and land and $100,000 in assets in 52 months. SOLUTION WITH PLANNING: IMMEDIATE ELIGIBLE FOR MEDICAID -Home and adjacent land is a protected homestead. Home is eventually transferred into the husband’s name to avoid estate recovery and then husband establsihes a lady bird deed for the benefit of the children. -Petition to Probate Court to increase the monthly income allowance of Husband to include ALL OF THE INCOME OF THE WIFE so that he can continue to afford to pay for his assisted living. -Husbands protected spousal resource allowance (PSRA) is up to 50% of the total countable assets up to approximately $109,560. In this case 50% of $700,000 is greater than the maximum therefore the PSRA is $109,560. -Establish Trust for the Sole Benefit of the Community Spouse (husband) and transfer approx. $600,000 of the countable assets which includes the bonds to Trust. This trust is not a countable asset for Medicaid and will pay the assets to husband over his life expectancy or less. The SBO Trust uses the grantor’s social security number. THIS SOLE BENEFIT TRUST CAN WORK FOR ANY SIZE INVESTMENT PORTFOLIO ACCOUNT and CAN HOLD TITLE TO REAL ESTATE.