If a spouse requires long-term institutional care then it will have a significant impact on the family’s finances. Only after the assets have been spent down will Medicaid provide coverage for that spouse’s long-term care needs. This is known as the Medicaid spend-down process.
In most cases the marital residence can be protected for the healthier spouse. Both federal and state laws allow the house to be transferred to the healthier spouse. According to the federal law set forth in 42 U.S.C. §1396p (c) (2) (A), the marital residence can be transferred to the healthier spouse without penalty at any time.
The applicable New Jersey Medicaid regulation is N.J.A.C. 10:71-4.10 (d) (1). According to this New Jersey Medicaid regulation, an individual is permitted to transfer title of the home to a married spouse at any time, as long as the home served as their principal place of residence.
After the home is transferred to the healthier spouse and Medicaid eligibility is acquired for the institutionalized spouse, then steps should be taken to further protect the house from Medicaid. These are issues that should be reviewed with a qualified elder law attorney.
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