Dale M Krause
Expert
- In the case of a couple, with one spouse at home and (the wife) and the other spouse (the husband) in a long-term care nursing home facility (help with essential functions in life: eating, bathing, dressing, toileting, and transferring), the answer is a Funeral Expense Trust (FET) for each, and a Medicaid Compliant Annuity (MCA) for the wife.
- Assume the couple has a house, one car, traditional furniture, personal property, and $300,000 in bank accounts. The wife has monthly social security of $1,500, and the husband has $1,700. The monthly cost of his care is $8,000.
- With $300,000 in savings, they know their wealth will be exhausted in 37 months.
- Under Medicaid rules, the wife keeps the house, car, all the furniture, and personal property, as well as $154,140 from the bank accounts; the husband retains his personal property and $2,000 from the bank accounts.
- To get him Medicaid eligibility, they need to spend $143,860.
- By setting up a $10,000 Funeral Expense Trust (FET) for each and a $123,860 Medicaid Compliant Annuity (MCA) for her, he is immediately eligible for Medicaid benefits.
- Now, instead of paying $8,000 for his care, he will pay only $1,650, with Medicaid paying the balance.
- The wife will have a monthly income totaling $6,670.
- Setting up FETs and an MCA can be complex, but you can protect your excess assets with the right professional assistance while qualifying for Medicaid coverage.