If your parent or your spouse needs to go into a nursing home and no preparations have been made, what can you do? First, get your loved one admitted to a first-rate nursing home on a “private pay” basis. Then, arrange an asset transfer, leaving the nursing home resident enough assets to pay nursing home bills until he or she can apply for Medicaid.
For example, if your widowed mother has $90,000 in assets, she might give away $50,000 to you and your siblings while keeping $40,000.
Assume that the average cost of a nursing home in her area is $5,000; she can apply for Medicaid after a 10-month waiting period ($50,000 divided by $5,000). During those 10 months, she can spend down her $40,000 on nursing home payments. The shortfall can be covered by her income (from Social Security, for example) and perhaps by contributions from other family members. After the 10 months are up, your mother can apply for Medicaid, which will pay her ongoing nursing home bills. The nursing home is not likely to evict her and your family will have preserved most or all of the $50,000 asset transfer.
