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Wednesday, June 3, 2015

Is Divorce the Best Option for People Over 65?

Your parents may have had a long and relatively happy marriage. They may intend to live together until their death. Nonetheless, the financial reality of today’s government rules may force them to consider divorce.  And there is no need for psychological counseling at this point. Divorce, with future cohabitation, would be done simply to qualify for long term care benefits.

Current Medicaid rules tacitly encourage divorce. In New York State, for people over 65, to qualify for Medicaid as an individual, one cannot have income of greater than $825 a month. A married couple cannot have income of greater than $1,209. Clearly, a divorced couple can shelter a greater amount of income than a married one. Furthermore, an individual on Medicaid cannot have assets of greater than $14,850. A married couple cannot have assets of greater than $21,750, again, penalizing a couple and encouraging divorce.

When only one spouse needs Medicaid (in order to receive home care or nursing home care), divorce may simply become a necessity in order to shelter some of the assets.  A ‘community spouse’ (the spouse which is not receiving Medicaid) is permitted to keep no more than $119,200 of assets, and no more than $2,980 of income per month. Any excess above these numbers may be subject to a Medicaid recovery lawsuit. As a result, the sick spouse may transfer all of his assets to his spouse, and then the spouses divorce.

The information in this blog was adapted from

http://www.huffingtonpost.com/rev-amy-ziettlow/is-divorce-the-best-option-for-older-americans_b_6878658.html

 

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.


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