Let’s recap. In general, a patient is eligible for Medicaid benefits to pay for long-term skilled nursing care in Michigan if they have not more than:
- One motor vehicle,
- One house worth not more than $585,000 (This limit does not apply if the patient’s spouse or a blind, disabled, under-21-year-old child lives there.)
- Pre-paid funeral goods and services not exceeding $12,770
- A very small life insurance policy (Michigan excludes the entire cash surrender value when the total face values of all policies a policy owner has for the same insured are $1,500 or less) and
- $2,000 in cash or on deposit
If you have excess cash, buy a car. Remodel your house. Buy furniture or carpeting for your house. Put in a new furnace or put on a new roof. Pre-pay your funeral and that of your spouse.
Buy one of the following for each of your parents, children, siblings and the spouse of each of those people: a burial plot, gravesite, crypt, mausoleum, casket, urn or niche.
Pay off your mortgage and/or your home equity loan. This increases the net worth of your home for the benefit of your heirs. Just make sure that the home passes to your loved ones outside of probate using a trust or a Lady Bird Quit Claim Deed, for example. Otherwise the state of Michigan will be a creditor of your probate estate and be reimbursed for the cost of your care before your heirs get anything.
Irrevocably assign your too-large whole life insurance policy proceeds to a reputable funeral director. This removes the policy from your assets and pre-pays your funeral, a win-win.
Remember, do not give away cash or any other assets! This is called divestment and will render you ineligible for Medicaid benefits for as long as the value of what you gave away would have paid for your care.