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Caring For Generations

Joint Ownership May Not Turn Out Like “Going Halfsies”

On Behalf of | Jan 25, 2017 | Estate Planning

Nice idea, this “going halfsies” for married couples, with each spouse putting money into a jointly held savings or investment account which either spouse may access. However, as an estate planning attorney in Indiana, I sometimes need to break the news to clients that those very convenient jointly held accounts may end up creating problems for them when it comes to collecting eldercare benefits from the government.

Many people believe that joint accounts are a good way to avoid probate while transferring money to loved ones, and that’s true. Of course, joint accounts held with children as co-owners can make those accounts vulnerable to a child’s creditors.  When it comes to elder law, there’s another even more important issue with jointly held accounts: 
According to Indiana rules, when any type of account held in a financial institution is jointly owned, it is presumed that all of the funds belong to each owner. When a person applies for Medicaid to cover nursing home costs, the state looks as the applicant’s assets to see if he or she qualifies for assistance.  This includes joint accounts, even if only spouse needs care and he or she did not contribute to the funds in that account.

When the state determines your financial eligibility for Medicaid, some assets are counted, while others are excluded, explains Assets usually counted include:

  • checking and savings accounts
  • stocks and bonds
  • CDs
  • real estate other than primary residence
  • motor vehicles (if you have more than one)

Assets usually not counted for eligibility include:

  • primary residence (there are equity interest limits)
  • personal property and household belongings
  • retirement plans of the spouse not in need of care
  •  term life insurance
  • up to $10,000 in burial funds
  • assets held in certain trusts

At Geyer Law, we are acutely conscious of the fact that individuals and families facing the prospect of an extended nursing home stay deal with more than emotional difficulties; they must grapple with paying for nursing home care.  Few can afford to privately pay for nursing home care for any extended period of time and Medicaid will not pay unless assets are depleted.

The more – and the sooner –  Medicaid planning is undertaken, the more assets can be preserved for the family.  “Going halfsies” is hardly enough to solve the problem!
– by Ronnie of the Rebecca W. Geyer blog team