Ask the Expert: What can at-home spouse keep?

My husband and I are both over 80 years old. We have a house, our Social Security and his IRA, which is under $100,000 and pays our living expenses. If he needs nursing home care, must his required IRA distributions be spent on his care? I believe the at-home spouse of a Medicaid recipient is allowed to keep some assets. Would it be necessary to move money from his IRA to other savings to qualify it for this exemption?

An at-home spouse can keep $109,560 in her name. But transferring money from his IRA into your name is a bad idea because IRA withdrawals are taxable.

To qualify for nursing home Medicaid benefits, he can't have more than $13,800 of assets in his name, says Jennifer Cona, a Melville elder law attorney. That doesn't include his primary residence or an IRA from which he's taking distributions. But the IRA distributions go to the nursing home; and they must be based on his life expectancy, according to Medicaid's actuarial table, not the Internal Revenue Service table. The Medicaid table requires bigger distributions.

The "at-home" spouse is allowed $2,739 of monthly income in addition to $109,560 of assets. The income entitlement could mean the IRA distributions go to you instead of the nursing home, Cona says. If your other monthly income is only $739, for example, you'd be entitled to $2,000 of your husband's income. If the house is solely in his name, she recommends he transfer it to you. Otherwise, Medicaid can put a lien on it and force a sale after his death to recoup benefits paid to him. That can't happen if you own it jointly with right of survivorship.

THE BOTTOM LINE The spouse of a nursing home resident on Medicaid is entitled to keep $109,560 of assets and $2,739 of monthly income.

Two websites with more

information: bit.ly/ayY0JW and bit.ly/agFfsC.