By: Anthony J. Enea, Esq.
It has become common to hear of individuals being married or remarried late in life. Whether it be because we are living longer or because divorce has become more prevalent as individuals age, seeing 60 or 70 plus year olds tie the knot is no longer a novelty. Additionally, the legalization of same-sex marriage in New York with the passage of The Marriage Equality Act (June 24, 2011) has also resulted in numerous late in life marriages. While those marrying late in life are often aware of the laws relevant to a potential dissolution of their marriage, and in many instances execute a pre-nuptial agreement, they often are less familiar with the rights and obligations if their spouse becomes ill and requires long term care, and what rights does his or her spouse have upon his or her demise.
In this article I will provide an overview of the issues and laws that will impact the long term care issues of those marrying late in life.
Long Term Care Issues
It has been my experience that those marrying late in life generally maintain their finances separately, with perhaps the exception of a joint checking account. What is often not realized and results as a major surprise when one spouse requires long term care is that irrespective of the fact they have maintained their finances separately during their marriage, that for purposes of their spouse being eligible for either Medicaid nursing home or home care benefits that they are considered a “legally responsible relative.” Thus, his or her assets and income will be counted and deemed available for Medicaid eligibility purposes. 18 New York Code of Rules and Regulations (NYCRR) §360-1.4(H).
Shock and dismay are often part and parcel of a conversation where I have had to advise a spouse that the fact he or she separately maintained his or her finances for decades is of no importance for purposes of Medicaid eligibility, and that it will be necessary that his or her assets be disclosed to Medicaid. Their dismay upon learning of this is further compounded by the realization that in order for their spouse to qualify for Medicaid it may be necessary that the spouse requiring Medicaid transfer his or her assets to them, and that he or she will then have to execute what is known as a “spousal refusal” statement. The “spousal refusal” states that he or she refuses to utilize his or her income and assets to pay the medical expenses of his or her spouse, and will allow an applicant that has a “legally responsible relative” to become eligible for Medicaid despite the fact the legally responsible relative (spouse) has income and assets above the Medicaid permitted eligibility levels. Social Services Law (SSL) §366(3)(a) and 18 NYCRR §360-4.3(f)(1)(i). The execution of a “spousal refusal” requires the Medicaid district to consider only the income and assets of the applicant without considering the income and assets of the refusing spouse. However, the spouse must legally provide information to Medicaid as to his or her assets and income. The spouse’s failure to provide said information can’t be used in the initial determination of eligibility of the applicant, however, an ongoing refusal to provide the requisite financial information will result in a denial of the application. SSL §366(3)(a) and 18 NYCRR §360-4.3(f)(1)(i). In the event they were living separate and apart from each other at the time the applicant entered the nursing home, then in that event the failure of the non applicant spouse to provide the requisite financial information will not impact the eligibility of the applicant.
With respect to the enactment of The Marriage Equality Act and same sex marriages, the New York State Department of Health has issued a memorandum to all Medicaid districts requiring them to recognize same sex marriages if the couple was legally married in a jurisdiction (state or foreign country) that recognizes and performs same sex marriages, and requires Medicaid to determine eligibility for same sex couples in the same manner as for any other married couple. GIS Memorandum 08MA/023
Once the refusing spouse has executed the “spousal refusal” statement said spouse has now subjected him or herself to a liability to Medicaid and a potential action by Medicaid for recovery of the amounts actually paid by Medicaid for the nursing home or home care costs of his or her spouse. For Medicaid nursing home purposes, this amount is significantly less (often 40-60% less) than the amount it would have cost if the applicant and his or her spouse paid the nursing home at its private pay rate (average downstate $13,000-15,000 per month).
Although, once the Medicaid nursing home application is filed with a spousal refusal and the application has been approved by Medicaid there are many post-eligibility planning opportunities that can be implemented by the refusing spouse to limit his or her exposure to Medicaid’s claims.
As can be seen from the above because Medicaid can only seek recovery of the amounts it has actually paid, the execution of the “spousal refusal” is often a logical option. However, to a spouse that has no inkling that his or her late in life marriage could result in this potentially significant financial exposure, it is a cause for great consternation, and sadly, in some cases leads to a discussion of the possibility of a divorce. It should be noted that in New York there are laws that provide that a separated or divorced spouse will still continue to have a continuing obligation to support a former spouse who has become a “public charge” or a victim of extreme hardship. NY CLS Family Court Act $463, General Obligations Law $5-311.
As stated above there are potentially many complications that will arise from a spouse needing long term care. For example, the spouse requiring nursing home care may need to have his or her assets transferred to the refusing spouse (spousal exempt transfer for eligibility purposes), so that he or she will have no more than $14,250 (the resource amount permitted for 2012) for purposes of Medicaid eligibility. Thus, where said applicant spouse has children from a prior marriage, the transfer of assets from one spouse to the other may have a significant impact on his or her estate plan vis-a-vis said children. Once the assets are transferred to the spouse so that Medicaid may be obtained, there is no assurance that said spouse will make any provisions for his or her spouse’s children in his or her testamentary plans. There is also, of course, the separate issue as to what mechanism will be utilized to transfer the applicant spouse’s assets. Is there is a Durable General Power of Attorney in existence with broad gifting authority or are the finances and realty jointly held? These are issues that will need to be addressed if the Medicaid applicant spouse lacks the capacity to make the transfer, which in many instances is often the case.
Clearly, the decision to marry or remarry late in life is one that should always only be undertaken after consideration of all the potential consequences. However, because of the significant increase in the numbers of seniors suffering from debilitating illnesses such as Alzheimers and Parkinsons, particular attention should be paid to the potential financial consequences if a spouse requires long term care. These consequences can be financially devastating.
Anthony J. Enea, Esq. is the Managing Member of Enea, Scanlan & Sirignano, LLP with offices in White Plains and Somers N.Y. He can be reached at (914) 269-2367 or at A.firstname.lastname@example.org. He is the Immediate Past Chair of the Elder Law Section of the New York State Bar Association and is the recipient of the “Above the Bar Award” as the leading elder care attorney in Westchester County. He is AV Rated Preeminent and has been designated as a “Super Lawyer” and “Best Lawyer”.