Medicaid Spousal Refusal & Asset Protection
Navigating Long-Term Care Without Losing Everything
When a loved one requires nursing home or long-term care, families are often faced with overwhelming questions:
- How will we afford this?
- Will we have to sell our home?
- Can we keep our savings intact?
At Angiuli & Gentile, LLP, we help married couples find answers to these difficult questions through strategic elder law planning — including the use of Medicaid spousal refusal and asset protection tools. Our experienced attorneys guide families through the complex Medicaid application process, ensuring they understand their rights and preserve the financial stability of the community spouse (the one remaining at home).
In this guide, we explain how Medicaid spousal refusal works, what assets can be protected, and how our firm helps New Yorkers make informed, legally sound decisions.
Understanding Medicaid Spousal Refusal
What Is Spousal Refusal?
Medicaid spousal refusal is a legal strategy permitted in New York State that allows one spouse to formally refuse to contribute financially to the cost of their partner’s long-term care. While this may seem counterintuitive, it is a recognized and lawful option designed to prevent the community spouse from becoming impoverished when the other requires institutional care.
In this situation, the institutionalized spouse — the one entering a nursing home — applies for Medicaid, while the community spouse refuses to make their income and assets available for the application. Despite the refusal, Medicaid must still assess the applicant’s eligibility and, in many cases, will approve benefits without requiring the contribution of the community spouse.
Why Is Spousal Refusal Used?
Spousal refusal is typically used to protect the financial well-being of the healthy spouse. Without it, a couple may be forced to spend down assets far below what is necessary for the community spouse to live independently and securely.
By leveraging spousal refusal, families can preserve:
- A shared home
- Joint savings and retirement accounts
- Income-producing investments
- Livelihood for the community spouse
This option is especially valuable for middle-class families who do not qualify for Medicaid outright but cannot afford private nursing home care.
When and Where Spousal Refusal Applies
Is Spousal Refusal Legal in All States?
No. Spousal refusal is not universally recognized. It is primarily allowed in New York and a few other states. Each state administers Medicaid under its own guidelines, so strategies that are permitted in one jurisdiction may be prohibited in another.
Because New York permits spousal refusal, it has become one of the most important tools in elder law Medicaid planning within the state. However, even in New York, this strategy must be implemented carefully and in full compliance with legal procedures.
What Assets Can Be Protected?
Exempt vs. Non-Exempt Resources
Medicaid rules distinguish between exempt assets (which do not count toward eligibility limits) and non-exempt assets (which must be spent down). When used appropriately, spousal refusal can preserve a significant portion of both.
Commonly Protected Assets Include:
- Primary Residence: The home is typically exempt if occupied by the community spouse. However, equity limits apply.
- Vehicle: One car, regardless of value, is considered exempt.
- Personal Property: Household items, clothing, and furniture are not counted.
- Retirement Accounts: Depending on how they are structured, retirement accounts in the name of the community spouse may be protected.
- Prepaid Burial Funds: Funeral and burial arrangements funded through irrevocable accounts are exempt.
- Community Spouse Resource Allowance (CSRA): As of 2025, the community spouse can keep up to $154,140 in countable assets.
By working with an attorney, couples can ensure that their resources are properly categorized and protected under Medicaid guidelines.
The Medicaid Spousal Refusal Process in New York
Step-by-Step: How It Works
- Financial Assessment
We begin by reviewing the income, assets, and liabilities of both spouses. This includes retirement accounts, savings, pensions, real estate, and more. - Determine Eligibility
We help you understand whether the institutionalized spouse meets Medicaid’s strict income and asset limits — and what adjustments may be necessary. - Prepare the Spousal Refusal Statement
The community spouse signs a legally binding statement refusing to make their income or assets available for the care of the institutionalized spouse. This is submitted along with the Medicaid application. - Submit Medicaid Application
Our attorneys prepare and file the complete Medicaid application, ensuring all documentation is thorough, accurate, and compliant with New York State requirements. - Respond to Legal Challenges (If Any)
While the Department of Social Services may pursue a support action against the refusing spouse, such cases are rare. If legal action is taken, we defend the community spouse and often negotiate favorable settlements. - Fair Hearing Representation
If Medicaid eligibility is denied or delayed, we represent our clients at fair hearings to appeal the decision and secure benefits.
Legal and Financial Considerations
Are There Risks to Spousal Refusal?
Yes — like all legal strategies, spousal refusal comes with certain risks. These may include:
- Potential Legal Action: Medicaid may initiate a lawsuit against the refusing spouse to recover the cost of care.
- Documentation Requirements: Failure to properly document the refusal or asset structure can result in denial of benefits.
- Ethical Concerns: Some families are uncomfortable with the optics of “refusing to pay,” even though it is legally permitted.
However, with skilled legal representation, these risks can be mitigated or avoided altogether.
Is Spousal Refusal Right for Everyone?
Not necessarily. While it is a valuable tool, spousal refusal is not the best fit for every family. Factors such as income levels, asset types, age, and long-term goals all play a role. Our attorneys conduct a full analysis before recommending this or any other Medicaid planning strategy.
How Angiuli & Gentile, LLP Can Help You With Medicaid Spousal Refusal
Experienced Elder Law Attorneys on Your Side
At Angiuli & Gentile, LLP, we have over 30 years of experience helping New York families navigate the complexities of Medicaid, elder law, and long-term care planning. We provide personalized legal guidance based on your unique circumstances.
Our Services Include:
- Comprehensive Medicaid eligibility analysis
- Preparation and filing of Medicaid applications
- Drafting and submission of spousal refusal statements
- Defense in Medicaid support actions or hearings
- Asset protection using trusts and exemptions
- Coordination with financial advisors and care facilities
- Estate planning integration for long-term security
We act as your legal partner — helping you preserve your family’s assets, secure necessary care, and avoid costly mistakes.
Why Clients Choose Us:
- Deep knowledge of New York Medicaid law
- Trusted counsel from dedicated elder law attorneys
- Prompt communication and responsive service
- Proven track record of success in Medicaid approvals
- Clear explanations in plain English — no confusing legal jargon
When the stakes are high, and your family’s future is on the line, you need more than a general practice lawyer — you need a law firm that lives and breathes elder law.
Frequently Asked Questions About Medicaid Spousal Refusal
What is Medicaid spousal refusal, and how does it work?
Medicaid spousal refusal is a legal strategy that allows the spouse of a Medicaid applicant to formally refuse to contribute financially to the cost of the applicant’s nursing home or long-term care. This strategy is recognized in New York and allows the institutionalized spouse to qualify for Medicaid based solely on their own assets and income — not the community spouse’s. Despite the refusal, Medicaid must process the application and make an eligibility determination. While the state may seek repayment from the refusing spouse, this is rare and often negotiable.
Is Medicaid spousal refusal legal in all states?
No. Spousal refusal is only legal in a few states, and New York is the most prominent jurisdiction where it is widely used. In other states, Medicaid may treat spousal refusal as non-cooperation, which could delay or prevent approval. That’s why it’s crucial to work with an elder law attorney familiar with New York’s Medicaid rules.
Can I really keep my home if my spouse goes on Medicaid?
Yes — in most cases. If you remain in the home, it is considered an exempt asset under Medicaid rules in New York. However, proper legal planning is essential to avoid estate recovery after the institutionalized spouse passes away. Our firm can help you protect the home both during and after the Medicaid application process.
Will the state sue me if I file a spousal refusal?
The New York Department of Social Services has the right to initiate a support proceeding against the refusing spouse to seek repayment for care costs. However, these cases are often resolved through negotiation and rarely result in full repayment. With the help of an experienced Medicaid planning attorney, you can respond to such actions effectively or prevent them altogether.
How much money can I keep as the community spouse?
As of 2025, the Community Spouse Resource Allowance (CSRA) in New York allows you to keep up to $154,140 in countable assets. Additionally, you may retain income up to the Monthly Maintenance Needs Allowance (MMNA), currently set at $3,853.50. These figures are adjusted annually. Certain assets, like your primary residence and one vehicle, may also be exempt.
Contact Angiuli & Gentile, LLP Today
The decision to place a loved one in long-term care is never easy — and the financial implications can be overwhelming. But with proper planning, you don’t have to lose your life savings to qualify for Medicaid.
At Angiuli & Gentile, LLP, we will help you understand your options, file your Medicaid application, and take full advantage of New York’s powerful legal protections — including spousal refusal. Every case we take on is treated with care, urgency, and respect.
Contact us today to get started.
We’re here to protect your family’s future — legally, financially, and personally.
