Medicaid Eligibility with Spousal Refusal: A Case Study

Managing finances when a spouse requires long-term nursing home care can be complex and overwhelming, especially when substantial assets are involved. This article explores a case where a well spouse must navigate the Medicaid eligibility process for a sick spouse who has suffered a brain injury.

Case Overview

In this scenario, a couple has combined assets totaling $3,200,000. The sick spouse, 45 years old, receives $1,200 per month in income but does not qualify for Medicaid due to the high asset value. Nursing home care costs approximately $10,400 per month, and with a life expectancy of 38.09 years, the sick spouse would eventually deplete their funds, leaving both spouses financially vulnerable. The solution? Spousal refusal.

Understanding Spousal Refusal

Spousal refusal is a legal strategy that allows the well spouse to refuse to use their assets or income to pay for the sick spouse's medical care. This method, along with completing an Assignment of Right to Support, helps preserve assets for the well spouse's future needs while enabling the sick spouse to qualify for Medicaid. Additionally, if a power of attorney document exists, the well spouse retains decision-making authority over the sick spouse's financial and medical matters.

Key Components of Spousal Refusal

1. Refusal Statement: The well spouse must formally declare their refusal to use their assets and income for the sick spouse's care. This declaration is submitted to Medicaid.

2. Assignment of Right to Support: This document assigns the sick spouse's right to support from the well spouse to the state, making it possible for Medicaid to pursue reimbursement from the well spouse.

Financial Implications

Without spousal refusal, the couple would need to spend down their $3,200,000 in assets until they reach Medicaid eligibility limits. Given the high cost of nursing home care, these funds would be exhausted in approximately 25.6 years, long before the sick spouse’s expected lifespan. Additionally, this would leave the well spouse without sufficient resources for their own care as they age.

Steps to Implement Spousal Refusal

1. Consult with Legal Experts: Engage an elder law attorney specializing in Medicaid planning to ensure all steps are correctly followed and legal requirements are met.

2. Prepare Refusal Statement: Draft and submit the formal spousal refusal statement to the Medicaid office.

3. Complete Assignment of Right to Support: Execute and submit the Assignment of Right to Support document, transferring the support obligation from the well spouse to the state.

4. Medicaid Application: Apply for Medicaid on behalf of the sick spouse, ensuring all documentation is accurate and complete.

Benefits of Spousal Refusal

1. Asset Protection: The well spouse can preserve the couple’s assets, ensuring financial security for their future care needs.

2. Medicaid Eligibility: The sick spouse becomes eligible for Medicaid, covering the high costs of nursing home care.

3. Financial Stability: This approach provides long-term financial stability for both spouses, preventing the depletion of their assets and ensuring continued care.

4. Decision-Making Authority: If designated as a power of attorney, the well spouse retains decision-making authority over the sick spouse's financial and medical matters, ensuring their best interests are safeguarded.

Conclusion

For couples with substantial assets facing long-term nursing home care, spousal refusal is a strategic and legal option to protect financial resources while ensuring the sick spouse receives the necessary care. By consulting with experts and properly executing required documents, the well spouse can safeguard their financial future and maintain Medicaid eligibility for their partner. This proactive approach helps balance immediate care needs with long-term financial stability, offering peace of mind for both spouses.

Contact atCause Law Office for Personalized Assistance

If you have questions about Medicaid planning in Florida, our experienced team is here to help. Schedule a consultation today to discuss your unique needs and explore effective asset protection strategies.

For personalized assistance and expert guidance, call atCause Law Office at 727-477-2255. Our dedicated team is ready to offer comprehensive solutions to secure your legacy and protect your assets.

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