What are the first planning steps a couple should take when one spouse’s health starts to decline?
Before a crisis hits, it’s crucial to ensure that all necessary legal documents are in order, including wills, advanced medical directives like durable healthcare powers of attorney and living wills, and general durable powers of attorney for financial matters. Protecting assets, especially the house, by considering moving assets into a trust to safeguard them from Medicaid penalties while retaining enough to cover potential long-term care costs is also important. Additionally, a comprehensive review of overall assets to minimize exposure to long-term care costs should be undertaken.
How does New Jersey’s Medicaid program treat married couples differently in terms of qualifying for long-term care coverage compared to single individuals?
For married couples, there are countable and non-countable assets. Non-countable assets include personal effects, the residence, and a car. Spouses are entitled to protections like the minimum monthly maintenance needs allowance and the community spouse resource allowance. The house can be transferred to the healthy spouse’s name to protect it from Medicaid liens. The Community Spouse Resource Allowance divides liquid assets between spouses, with a cap on the amount the healthy spouse can retain.
What are the best planning tools for couples to put in place while both are still competent to make future planning easier?
Solid estate planning documents, including wills, healthcare directives, and powers of attorney, are essential. A comprehensive power of attorney that allows for gifting and trust establishment is crucial. Timing for planning is critical, with considerations for asset transfers based on warning signs or diagnoses like Alzheimer’s to ensure eligibility for Medicaid without compromising quality care or financial independence. Prioritizing top-shelf care for the ill spouse and maintaining a high standard of living for the healthy spouse are key objectives in long-term planning.