Medicaid in Illinois: Protection of the healthy spouse's assets and income | Community Spouse Resource Allowance
Most people are aware that in order to apply for Medicaid for long-term care you are required to spend down the majority of your own assets. In Illinois, in order to be eligible for Medicaid assistance, the recipient must have less than $2,000.00 in non-exempt assets. But what happens when the Medicaid recipient has a healthy spouse? States have recognized that, due to the financial burden of long-term care, there should be a mechanism for one spouse to receive Medicaid benefits while the other spouse (called a "community spouse") retains enough income and assets to live on. This is the purpose for the "community spouse resource allowance" in Illinois.
Assets held in your spouse's name generally count as your assets for the purpose of applying for Medicaid. However, In 2016 in Illinois, while the Medicaid applicant or recipient must have less than $2,000.00 in assets, the Medicaid recipient's spouse is allowed to keep $119,220.00 in countable (or non-exempt) assets. This is called the "community spouse resource allowance." The Medicaid recipient and community spouse are permitted to retain certain exempt assets in addition to the community spouse resource allowance. Exempt assets include:
In addition, the community spouse is permitted to maintain an income of up to $2,739.00 per month without negatively affecting Medicaid benefits. If the community spouse is making less than this amount in income, then the Medicaid applicant may count some or all of his or her income (such as Social Security payments) as that of the community spouse.
Unlike transfers to other family members or loved ones which are limited by the 5 year look-back period, transfers can be made from the Medicaid applicant to the community spouse at any time without negatively impacting Medicaid benefits.
After the Medicaid recipient passes, the state government can seek seek to be repaid Medicaid's expenses for his or her long-term care from the Medicaid recipient's estate. However, collection on this debt cannot move forward while the community spouse is living. In the case where the community spouse outlives the Medicaid recipient, collection of Medicaid expenditures will be sought from the estate of the community spouse to the extent that the estate contains assets that were owned by the Medicaid recipient at his or her death (like a jointly owned home).
Although the state may place a lien on the home of the community spouse if it falls into this category, the community spouse can freely transfer, sell, or give away any of her property during her lifetime. Good Medicaid planning will ensure that all assets are transferred to the community spouse prior to the death of the Medicaid recipient in order to allow those assets to pass from the community spouse to the community spouse's heirs without the interference of state Medicaid recovery.
You may also be interested in:
Contact our Will County & DuPage Elder Law Attorneys
Illinois Law Blog: Learn About Law
O’Flaherty Law is based in Downers Grove, Elmhurst, and Naperville, Illinois. Our team has expertise in many areas of law including but not limited to bankruptcy law, business & corporate representation, civil litigation, criminal defense, estate planning, divorce & family law, immigration; probate, guardianship & elder law; and real estate law. If you have any questions or would like to schedule a free consultation, please e-mail us at firstname.lastname@example.org or call us at (630)324-6666.
Where You Can Read Us
O'Flaherty Law has experience in legal services in the following legal practice areas: estate planning and probate; featuring wills and trusts, powers of attorney, living wills, estate tax avoidance and probate practice; real estate law; featuring commercial and residential sales and leases, foreclosure defense, short sales, REO closings and consent foreclosures, mechanic's liens and landlord and tenant disputes; family law; featuring divorces, child custody, child support, paternity, adoption and orders of protection; criminal law; featuring DUI, traffic and criminal defense; business representation; featuring entity selection, incorporation and s-corp election, bylaws and operating agreements, annual reports, annual meetings of shareholders, employment agreements, handbooks and warning and termination letters, business contracts, independent contractor agreements, trademarks and copyrights, regulation and licensing compliance and dissolution and mergers; business and personal bankruptcy; featuring Chapter 7, Chapter 11 and Chapter 13 cases; litigation; featuring commercial contract and tort law, employment and labor law, personal injury and collections; and immigration law.
Located in Downers Grove, Illinois, O'Flaherty Law serves DuPage County, Will County, Cook County, Kendall County, Kane County and McHenry County in Illinois, as well as the following cities: Wheaton, Naperville, Woodridge, Downers Grove, Darien, Willowbrook, Westmont, Lisle, Oak Brook, Warrenville, Glen Ellyn, Aurora, North Aurora, Batavia, Geneva, St. Charles, Lemont, Joliet, Bolingbrook, Plainfield, Crest Hill, Lake Forest, Lake Bluff, Northbrook, Highland Park and Chicago.
© 2015 by O'Flaherty Law. All rights reserved.