Division of Assets

Also known as the spousal impoverishment rules, is a Medicaid provision in federal law that is specifically designed for married couples facing long-term care needs. No more are the days of needing to get a divorce to protect the healthy spouse for the other’s spouse’s medical expenses.

Here’s a more detailed breakdown of how it works:

  • Protecting the Healthy Spouse:  When one spouse requires long-term care in a nursing home, the associated costs can quickly deplete their shared assets. KanCare is a government Medicaid program that helps cover these costs, has eligibility requirements that include limitations on countable assets, such as savings and investments. Division of assets allows the healthy spouse, also called the community spouse, to keep a portion of the couple’s combined assets, even if the ill spouse needs Medicaid to cover nursing home care expenses.
  • Fair Share for the Healthy Spouse:  There’s a federally mandated minimum amount, called the Community Spouse Resource Allowance (CSRA), that the healthy spouse is entitled to retain. This amount varies annually and is adjusted for inflation. In addition to the CSRA, some states, such as Kansas, have established even higher spousal protection allowances. See Current Medicaid Figures.
  • Ensuring Care While Preserving Savings: By allowing the healthy spouse to keep a portion of the couple’s assets, Medicaid protects their financial security in the future. This can be crucial for covering their own living expenses, potential medical needs, and potentially even long-term care costs down the road.
  • Key Considerations: It’s important to remember that division of assets only applies to married couples. Single individuals or couples who are not married don’t have this protection. Additionally, Medicaid eligibility rules and the specific amounts for the CSRA can vary by state.
  • Seeking Professional Guidance: Considering the complexities involved (believe it or not, it is NOT as simple as “adding all assets up and dividing by two!”) a division of assets isn’t something we recommend doing on your own. In addition to exceptions in the law, Ms. Armstrong also utilizes advance planning techniques to maximize savings and protect assets. It’s rarely too late, even if your loved one is already in long-term care!