I think divorce may be a viable solution in some instances. It does not matter who owns the resource, how long he/she has owned it, or how it was acquired. If divorce would allow the CS to shelter some or most of these resources, it needs to be considered - if there is a lot to loose financially. Any resource, based on dollar value is relevant to Medicaid when determining eligibility. If all resources are valued up front, with half being deemed his, the other half deemed hers, each has to spend down. The nursing home spouse spends down to $2,000.00 and the community spouse must spend down to x amount as determined by Medicaid. If the CS keeps 119,00.00 and no further resources are acquired, this money must last the duration of the CS lifetime. At $3,000.00/mo, how many months or years will $119K last? If CS has any life expectancy remaining CS may have a better financial outcome than had he/she stayed married. So I think the CS would be brain dead not to keep resources over and above the $119K. Can't get something for nothing and if divorce means keeping more assets for the CS, then couples, attorneys, and courts need to come to some conclusion and act accordingly. Not a preferred outcome, but maybe a necessity. Many seniors desperately need willed funds, trust funds, or other sources of income. It's possible there is a huge gap in the rocket scientists/politicians who came up with these survival amounts since the estate recovery was pursued. A great idea in some cases but catastrophic for the majority.
Excellent article, but this this pertain to spouses who have items in a trust, in only their name? Or real estate that was willed to only one spouse, or belonged to one spouse prior to a 20 year marriage?
I do not quibble with either of the previous two comments, though I do not see eye to eye with them either in every respect...
However, one person mentioned $5500 a month as the cost of a nursing home per month. In that person's locale that may be true...In my more or less middle or the road town in NC, the current cost at the nursing home where my wife lives, it is $9500 a month. That is for a shared room, full nursing care.
One benefit of marriage is to afford at least some security to both. If Medicaid requires CS to give up what's needed for survival and CS is deprived of spouse's love and care, and snf spouse is unhappy that CS is also suffering, I'm hard pressed to agree marriage is beneficial to either. That said, I don't understand how equitable decisions can be made by the court if the state is allowed to contribute it's 2-cents worth to Medicaid divorce proceedings. Medicaid is like the fox guarding the chickens. If CS is allowed to visit institutionalized spouse after a Medicaid Divorce, maybe that needs to be considered. The article is very good in that it makes the point of educating the divorce attorney as to the relevant Medicaid rules for assets to be left to cs. I've noticed no matter what any parties do, the bill can not possibly be repaid if the nursing home stay extends for too many months. Home equity, other assets just can't possibly keep pace with 5500.00/mo bill. Add estate recovery onto that and no parties are ever compensated for the expense plus there is now one more party thrown into the rabbit hole because he/she was not allowed to keep resources that would have been a means for support. So divorce should be on the table as an option.
Given that most elderly have much less than 100,000.00 in non-home assets, I consider saving this money for your kids to be fraud. On the other hand, sending everyone to poverty is not an answer either. What we need is free, high quality healthcare for everyone. And the wealthy should not be exempt from medicare withholding.
Well, I have no dog in the fight concering the issue of divorce...Ain't gonna happen with me and Medicaid (since 2009) wife...I would like to comment on the $119,000 allowance for the community spouse, however. Beware: if all assets except $2000 are put into community spouse's name, AND if the community spouse spends down to $119,000, and then the afflicted spouse applies for Medicaid, the "spenddown" process will only allow the community spouse to keep HALF of the $119,000. Thus, the community spouse should be aware that once assets are down to, or close to, $238,000, that is the time to apply..
Secondly, there is a device called the "Medicaid compliant annuity" which the community could buy and shield the money. That is what I did in 2009 and I was able to "keep" and additional $60,000 on top of the community spouse allowance..totally legal...I have no connection but used a firm headed by Dale Krause (google it if interested) for more info.
Third: many lawyers in my personal experience have not clue as to how current Mecaid law and spendown works....If some one tells you they will "divide the money" and when the afflicted spouse's half is spent down, the half of the community spouse is protected, then RUN.
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Medicaid Divorce: Is it a Viable Planning Option?
If the CS keeps 119,00.00 and no further resources are acquired, this money must last the duration of the CS lifetime.
At $3,000.00/mo, how many months or years will $119K last? If CS has any life expectancy remaining CS may have a better financial outcome than had he/she stayed married. So I think the CS would be brain dead not to keep resources over and above the $119K. Can't get something for nothing and if divorce means keeping more assets for the CS, then couples, attorneys, and courts need to come to some conclusion and act accordingly. Not a preferred outcome, but maybe a necessity. Many seniors desperately need willed funds, trust funds, or other sources of income. It's possible there is a huge gap in the rocket scientists/politicians who came up with these survival amounts since the estate recovery was pursued. A great idea in some cases but catastrophic for the majority.
Grace + Peace,
Bob
However, one person mentioned $5500 a month as the cost of a nursing home per month. In that person's locale that may be true...In my more or less middle or the road town in NC, the current cost at the nursing home where my wife lives, it is $9500 a month. That is for a shared room, full nursing care.
My two cents...
Grace + Peace,
Bob,
Secondly, there is a device called the "Medicaid compliant annuity" which the community could buy and shield the money. That is what I did in 2009 and I was able to "keep" and additional $60,000 on top of the community spouse allowance..totally legal...I have no connection but used a firm headed by Dale Krause (google it if interested) for more info.
Third: many lawyers in my personal experience have not clue as to how current Mecaid law and spendown works....If some one tells you they will "divide the money" and when the afflicted spouse's half is spent down, the half of the community spouse is protected, then RUN.
Grace + Peace,
Bob