One of the most common phone calls I receive in my practice is from a panicked spouse who says, “What can I do?  My spouse has been diagnosed with Alzheimer’s disease.  How am I going to pay for his health care needs? Am I going to lose my home?  Am I going to lose EVERYTHING ?”    

This couple has worked hard all their lives. They are frugal. They live on two Social Security checks, his modest pension and minimal investments.  They have no mortgage on their home. They routinely pay their bills and enjoy simple luxuries.  Without proper planning, however, they will lose the bulk of their life savings paying for long term care. 

They will learn that neither Medicare nor their private health insurance provide any payment for home health care costs. There is no long-term care policy.  When Husband must be relocated to a long term care facility because Wife can no longer safely care for him, they will then discover that neither Medicare nor Medicare supplemental insurance will pay the facility’s $8,000 plus monthly cost.  They will further learn that Medicaid is not available for Husband because they have “too much money."  Husband will not qualify for Medicaid unless the couple’s assets are below approximately $111,000 (2010 figure).   If they are over asset, they must “spend down” their hard-earned life savings to be eligible for benefits. Wife also will learn that she may not be entitled to all of Husband's monthly income to live off of.   

Later, when Husband dies, Wife loses his pension and one of their two Social Security checks.  She has spent nearly all of their assets to provide for Husband’s care, and now she may not be able to afford to live in her own home or meet her own aging challenges.   

Wife will not have the financial resources Husband had to delay her entry into a long term care facility.  As a single person, she will not be eligible for Medicaid until she has become impoverished under the state guidelines ($2,000 or less in total assets).  She then must sign over all of her income to the nursing home, except for a miserly “personal needs allowance” of $72.80 per month. When Wife passes, the home that the couple worked so hard for will be subject to a lien for reimbursement for the amount of Medicaid benefits paid on her behalf.  

An elder law attorney could help this couple to try to protect their income, life-long savings, and home from rising nursing home costs.  An elder law attorney may be able to:

• Preserve a portion of the applicant’s income for use by a non-institutionalized spouse;
• Provide for the transfer of the applicant’s assets to certain family members without creating a penalty period under Medicaid law;
• Protect life insurance policies and proceeds;
• Protect retirement benefits and accounts;
• Protect the applicant’s home; 
• Identify last minute expenditures that may be made for the applicant’s benefit without creating a penalty period for Medicaid eligibility purposes.

It is important to note that an elder law attorney is not the same as an estate planning attorney. While estate planning attorneys often focus on distributing your assets after you die, elder law attorneys address needs that arise before your death.  Elder law attorneys place special emphasis on preserving your money, income and assets to be used for your benefit should you become ill, disabled or incapacitated.  Elder law attorneys guide clients through the legal complexities associated with long-term home or nursing facility care, guardianships and/or conservatorships, and disability planning.  These subjects are not usually known or often considered by an estate planning attorney.

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