Q: If I divorce my husband, will his assets be lowered, so that he can qualify for Medicaid so he can get the long-term care he desperately needs?

Sometimes couples are willing to take the big step of obtaining a divorce in order to protect their assets, so that the ill spouse can qualify for Medicaid without impoverishing the well spouse. Under the federal Medicaid laws, a married couple can only protect up to $115,640 between the two of them (2012 figure). All countable assets over that amount must be "spent down," converted into non-countable assets, or otherwise disposed of in a way that does not cause a penalty period. Once a couple is divorced, of course, then the assets of the ill former spouse are counted but those of the other now-ex-spouse are not counted.

However, even if the divorce is amicable, it is not possible to "load up" all the assets into the name of the well spouse, figuring that Medicaid will provide for the care of the ill spouse, who therefore won't need any assets. The general rule is that there must be an "equitable distribution" of the assets and income of the couple. The circumstances and needs of each spouse must be considered. If all the assets are awarded to the well spouse, the state Medicaid department could view that as a gift from the ill spouse, causing a period of ineligibility. However, if it is demonstrated that the ill spouse's bills will be well-covered by Medicaid, but the living expenses of the well spouse are not financed by government programs, there should be a good argument for awarding a greater percentage of the assets to the well spouse.

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That being said, if the couple agrees that all things considered it would be worth obtaining a divorce, then a divorce attorney who will consult with another attorney who is familiar with these Medicaid rules should be hired. Ultimately, it can indeed protect a majority of the assets of the well spouse.

Before seeking a divorce, however, a consultation with an expert Medicaid planning attorney is well-advised, since there may techniques available to protect just as much of the couple's assets without having to obtain a divorce. That would not only save the substantial legal fees involved in any divorce, but also keep the marriage intact.