One of the most frustrating things for our elder law clients to grasp is that having made no plan for long term care and not having enough resources or income to pay for care at home, they find themselves forced to separate with one spouse living in a nursing home and the other living at home. On top of that, the two cannot have resources that exceed the Protected Resource Amount currently available to be retained by the community spouse.
Where income is truly limited, the rules allow the community spouse to retain an extra amount of resources which may be necessary to invest and generate additional income so that the community spouse is not left destitute. This is called an Expanded PRA.
Because the Expanded PRA is calculated using a hypothetical investment of funds in a 1 year CD, the amount of Expansion available can vary wildly over time. A high rate of return means a smaller amount of money invested to generate income and cover a shortfall in the community spouses minimum needs allowance. A low rate of return means that a much larger amount of resources will need to be invested to cover the same shortfall in income.
Right now 1 Year CD rates at banks local to our offices in The Woodlands, Texas have cratered. This means that fewer couples will have to engage in spend-down of funds to make sure that the confined spouse gets nursing care desperately needed and the community spouse gets enough to live on.
This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.