Joint Assets & Medicaid - How Bank Accounts, Property & Other Assets Impact Eligibility


When one spouse of a married couple applies for Medicaid (long term care), the value of both of the couple’s assets are considered for eligibility purposes. For liquid assets, such as bank accounts, stocks and savings, it does not matter if the asset is held in a joint account with both names or in separate accounts with only one name, all accounts are counted. As an example:

Joe and Sue are married and Sue is applying for Medicaid, Joe is not. Joe has an account in only his name with $25,000
Sue has an account in only her name with $50,000. Joe and Sue also have a third, joint account in both names, with $75,000. Therefore, from Medicaid’s perspective, Sue has assets valued at $150,000 ($25K + $50K + $75K = $150K).

For non-liquid assets such as homes or property, it does not matter which name or names are on the deed. All property assets of married couples are considered to be joint assets by Medicaid even if only one name is on the deed.

 The good news is there are many exceptions to how assets are counted. The bad news is it is very confusing. 

Medicaid allows a spouse of the applicant to keep a portion of the assets, rather than require the couple to completely spend down all of their assets on care for eligibility purposes. In addition, there are both exceptions and strategies that couples can employ when considering their joint assets and applying for Medicaid.



It is easier to understand how an individual can qualify for Medicaid and how their spouse can retain some or even most of their assets, if one first understands some Medicaid terminology.

Community Spouse - A community spouse (also called the well spouse) is the spouse of an individual who is receiving Medicaid-funded, long-term care in an institutional setting, such as a nursing home. To be considered a community spouse, the non-applicant spouse must not be living in an institutional setting. Rather, he or she must be living in their personal home or an assisted living facility.

Spousal Impoverishment Law - Also known as Division of Assets, this law was put into effect to protect the community spouse and ensure he or she has adequate finances to support him or herself. If not for the Spousal Impoverishment Law, Medicaid would combine the assets and income of both spouses and consider everything belonging to the applicant. The law would require that they spend everything on care thereby the community spouse would be “impoverished” and unable to support themselves.

Community Spouse Resource Allowance (CSRA) – this is the amount of assets the community spouse is allowed to keep under Spousal Impoverishment Law.

Minimum Monthly Maintenance Needs Allowance (MMMNA) – although not related to a couple assets, the MMMNA is the amount of the couple’s income the community spouse is allowed to keep. It is calculated based on one’s housing costs and other factors.

Countable Assets - these are assets that are liquid (can be turned to cash) and therefore, presumably, can be used to pay for care. These include life insurance policies, money market accounts, savings and checking accounts, certificates of deposit (CDs), mutual funds, stocks, and bonds as well as property such as second homes or second cars.

Exempt Assets - Not all assets are counted towards eligibility for Medicaid. While life insurance policies are considered countable assets, there is an exception: a life insurance policy that has a face value less than $1,500 is considered exempt. The couple’s primary home is also exempt up to a certain amount, provided the home is owner-occupied. In 2016, for some states this value is $552,000 and in other states it is $828,000. In addition, personal effects, household items, a single vehicle, and burial plots are exempt from Medicaid eligibility.


Assets Limits for 2016

In order for a senior to qualify for long-term Medicaid, the applicant must not have assets over a certain amount. This changes annually and differs in some states. In 2016, in most states, this amount is restricted to $2,000. Some states allow an applicant to have a higher amount of assets, but in no state does that amount exceed $10,000.

The Community Spouse Resource Allowance (CSRA), also varies based on the state. As of 2016, the minimum resource amount a state may allow is $23,844, while the maximum resource amount a state may allow is $119,220.

A further complication is that there are two different ways states can calculate this; there are 50% and 100% states. In the states known as 50% states, the community spouse is able to keep up to 50% of the resources, up to the maximum allowable amount. In 100% states, the community spouse is able to keep 100% of the resources, again, up to the allowable amount.

When calculating the CSRA, all exempt assets are deducted from the joint assets, and the remaining assets are added together and then divided by two. For example, say a married couple has $150,000 in joint assets that are non-exempt. When divided by two, it equals $75,000. So, this leaves $75,000 for the institutionalized spouse (which will have to be spent down to qualify for Medicaid) and $75,000 for the well spouse. (In a 50% state). In a 100% state, the community spouse may keep up to the maximum amount the state allows. In many states, this amount would come to $119,220.

2016 Medicaid Community Spouse Resource Allowance
Couples’ Combined Assets $50,000 $100,000 $150,000 $250,000 $500,000
Amount the “Community Spouse” keeps in a 50% State $25,000 $50,000 $75,000 $119,220 $119,220
Amount the “Community Spouse” keeps in a 100% State $50,000 $100,000 $119,220 $119,220 $119,220


While not an asset limit, the Monthly Maintenance Needs Allowance is relevant for those wish to turn assets into income through the purchase of an annuity.  The federal government sets a minimum and maximum monthly maintenance needs allowance, the amount allowed varies by state. As of 2016, this amount is somewhere between $2,002.50 and $2,980.50 


Strategies to Become Medicaid Eligibility while Preserving Assets

When a married couple has assets over the allowable amount, there are several strategies that can be used to lower the amount of countable assets, and in turn, become eligible for Medicaid. At the same time, these strategies may help families to lower debt or preserve their assets.

Pay Existing Bills - Assets can be used to pay existing debt. For instance, one may pay off a mortgage, credit card bills, or pay off a car loan. Medicaid does not penalize applicants for these financial transactions.

Purchase Annuities - An annuity is another strategy that is commonly employed to convert liquid assets into exempt assets. With an annuity, assets are turned into monthly income for the well spouse. (Recall that reasonable income for Medicaid applicants’ spouse is not counted towards eligibility of the applicant). The way an annuity works is a lump sum is paid to a commercial insurance company and then the well spouse is in turn paid a monthly payment. It’s important to note, the annuity must be irrevocable and the payments must not exceed the life expectancy of the well spouse. There are further state-specific requirements for annuities, so it is best to consult with a Medicaid planner

Create a Life Care Agreement - Life care agreements are formal agreements that are frequently made between an elderly individual and a relative or close family friend. Via this agreement, a transfer of assets is made in exchange for providing care for the senior. For instance, one may pay for someone to come to their home several days a week and provide assistance with housecleaning, meal preparation, transportation to appointments, and personal care with daily activities, such as dressing and bathing. In addition, one may serve as an advocate for an individual in a nursing home. Learn more about life care agreements.

Create a Funeral Trust – Certain irrevocable funeral trusts created for the Medicaid candidate and / or their spouse can enable a couple to reduce their countable assets by up to $25,000 (depending on their state of residence). Doing so helps to qualify a person for Medicaid while taking care of an inevitable expense that will eventually come out of the family’s resources. Be aware that not all funeral trusts are exempt and they can be complicated. Learn more.


Medicaid Planning Assistance

The subject of married couples and joint assets for Medicaid eligibility is a complicated matter. It is strongly advised that one seek assistance from a professional Medicaid planner prior to transferring or spending down assets or attempting any Medicaid planning techniques. Planners almost universally offer a no-cost introductory call during which the family’s situation is assessed. Learn more or be connected here a Medicaid planner here.


Violation of Medicaid Look Back Period

It’s very important to note, one cannot simply give away assets in order to qualify for Medicaid. If one gifts or transfers assets under fair market value, he or she may be penalized and a lengthy period of ineligibility might result. Learn more about the Medicaid Look Back Period.