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Should I Update My Will If My Spouse Needs Long Term Care?

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 You should consider updating your will if your spouse is receiving long term care either at home or in a facility. Here is why:

Many married couples have simple “I love you wills” that leave everything outright to the surviving spouse. This is logical for a healthy couple whose primary goal is to provide for each other for the remainder of their lives. But a problem arises if one of the spouses needs long term care.

Few couples have long term care insurance. Instead they initially rely on private funds to pay for care. If they deplete their funds, the government Medicaid program can be there to help pay the bills. Most individuals who receive nursing home care are on Medicaid. And Medicaid can help pay for care at home as well. But to qualify for Medicaid you have to have limited available resources. And protections that exist for married couples will no longer apply if one spouse dies.

By leaving everything to your spouse, you may make it very difficult for them to qualify (or continue to qualify) for Medicaid

Suppose your wife needs long term care. To qualify for Medicaid government benefits she can own only very limited funds. Virtually all the financial resources have to be held in your (the healthy spouse’s) sole ownership. Once your wife meets the Medicaid qualification requirements the government program will help pay for her care. Let’s assume she is now on Medicaid and that under Medicaid’s spousal protection rules, you (the “community spouse”) have been allowed to keep $100,000 in savings. You are using those savings to provide not only for yourself but to get your wife things she needs that are not covered by Medicaid.

If you die with a simple “I love you will” the entire $100,000 will go to your wife and cause her to lose her Medicaid benefits. She will have to spend down those funds before she will qualify again for Medicaid. Tens of thousands of dollars can be lost to pay for care which could have otherwise been covered by Medicaid.

If you want to avoid this result you could update your will to limit the amount of resources your wife will receive outright if you predecease her. For example, you might sign an “elective share will” that leaves your wife the minimum amount required by law (typically 1/3rd) outright, and places the rest of the inheritance in a protected trust. The funds held in trust won’t disqualify her from Medicaid and can be used to supplement your wife’s needs during her remaining lifetime. Anything left at her death can pass to your children or other heirs.

Bottom line: by updating your will if your spouse needs long term care, you can better ensure that money will always be available to supplement your spouse’s care. Talk to an experienced elder law attorney to get your will, beneficiary designations and other planning updated.