How to Protect Assets If Your Spouse Goes into a Nursing Home in Iowa

If your aging spouse needs extensive physical or mental care, you might feel like you’re caught between a rock and a hard place. Providing that care in your home can drain away all your own health. But care in a nursing home or other facility can drain all the financial resources you need to live on.

There are strategies to protect your assets if your spouse goes into a nursing home. The earlier you start planning, the more options you have available. However, an elder law attorney can help protect your resources even if you find yourself in a crisis situation where care is needed immediately.

Using Medicaid to Pay for a Nursing Home

Iowa Medicaid can provide benefits to pay for nursing home care as well as in-home care. However, eligibility is restricted to those who have very little income and almost no countable assets.

Many people feel like they have no choice but to spend everything they have on nursing home care until there’s almost nothing left and then apply for Medicaid. However, there are steps to take to preserve assets in a way that they will not be counted against eligibility. This is particularly important when one spouse still lives at home. However, the rules can be extremely complex, so it is important to take care to understand how to follow all requirements.

Protecting Resources for the Community Spouse

Nursing homes and Medicaid often refer to the spouse remaining in the home as the “community” spouse. Medicaid rules allow the community spouse to retain up to $148,620 in assets (2023), and all of that spouse’s separate income. In addition, the family home and one vehicle can be retained by the spouse in the nursing home. 

Shifting assets into the name of the community spouse can help preserve these assets if the transfer is done correctly. In addition, it may make sense to establish a trust to hold additional assets and pay benefits to one or both spouses. When an irrevocable trust holds assets, those assets do not legally belong to either spouse but to the trust. An asset protection plan might also include spending strategies to shift resources into non-countable assets.

While the community spouse can continue to live in the marital home, Iowa Medicaid may later try to seek reimbursement from the estate, so it is wise to develop a strategy to minimize the impact of recovery efforts.

Beware of Nursing Home Contracts

In addition to complying with Iowa Medicaid rules, it is important to watch for damaging terms in nursing home contracts. Spouses and other family members have been held liable for the cost of a loved one’s care, and those bills can be substantial.

An elder care attorney may be able to negotiate terms that limit liability. At the very least, a knowledgeable attorney can develop an asset protection plan that takes private creditors into account.

Protect Yourself with a Plan from Huizenga Law

Facing nursing home costs can be a frightening prospect, but the experienced team at Huizenga Law Firm, P.C. is ready to help. We develop custom plans to pay for care needs while protecting assets for the family and the future.

Because of Medicaid lookback rules and other requirements, however, it is best to start planning as soon as possible. To learn what may be possible in your situation, schedule a consultation with us now.