An important decision just out by the Michigan Supreme Court will probably help families who need some help with paying for long term nursing home costs. The state of Michigan Department of Health and Human Services or Department of Human Services has a big big role in administering the various Medicaid Programs in Michigan–even though the Feds also have a big role. (And as a vast over simplification, let’s say that the Medicaid budget for the state is about 50/50, between federal money and state money.)
When even solidly middle class couples face nursing home care, it’s not uncommon for them to run out of money pretty quickly, given a ballpark average of 8500 dollars for a nursing home per month. But if Sally wants to keep the home fires burning, keep living at their house, and staying a bit independent, but her husband needs a nursing home, what can they do? After all, Medicaid is a sort of welfare program and so the applicants are asked to spill the beans, of course, about their income and assets. Most think this is fair (but not everyone). But Medicaid rules are so strict for long term care (think nursing homes) that sometimes the community spouse ends up going almost broke too–or would without careful thought and careful arrangements.
That is where certain trusts were used, often called SBO trusts–to help the non-nursing home spouse keep their head above water and preserve some assets/income. Michigan made up rules, contrary to federal law it seems, to knock those plans, and take away those tools from the hands of families and elder law attorneys who could help. But some families and elder law attorneys said to the state’s Medicaid office–“hey, you shouldn’t do that, you are not really playing by the rules.” You know what that means–court actions, yada yada. Well now the Michigan Supreme Court just made a decision, essentially saying, the State of Michigan folks heading up the Medicaid office were not reading the rules right, and so, under the right planning, these trust arrangements ARE permitted.
This is good news for the elderly, especially the elderly middle class, who benefit from this sort of planning (it’s been said that very very very poor people usually qualify for help easily, and very very rich folks or folks with the rare great long term care insurance policies are seldom clients who need to do this sort of planning). See your local elder law attorney for more info. Meanwhile, here is a link to glance at the syllabus yourself: https://www.elderlawofmi.org/legal-resources