Paying for the ‘Institutionalized Spouse’ - The New Old Age Blog - NYTimes.com

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By CRAIG REAVES

Craig Reaves, past president of the National Academy of Elder Law Attorneys, practices in Kansas City, Mo., and on occasion fields questions from New Old Age readers. You may submit your question to newoldage@nytimes.com. Please limit your inquiries to general legal issues; Mr. Reaves can’t offer personal legal advice.

Q.

What happens when one half of a married couple is retired and in need of expensive nursing home care while a younger spouse is still working and earning income? Are there options for protecting any of the income or accumulated wealth (such as retirement accounts) of the younger spouse? Or does it all have to go to pay for the care of the one who’s ill?

A.

There’s no simple, legal way to shelter your income or most of your wealth in this circumstance. Spouses have a legal duty to support each other. The income or assets of a working spouse (known in the Medicaid world as the “community spouse”) must be used for the care of the spouse in the nursing home (in official parlance, the “institutionalized spouse”).
Couples who find themselves in this situation essentially have three options.
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