Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

To Love, Honor And Cherish Until Medicaid Is Needed

By: Anthony J. Enea, Esq.

Sadly, the exorbitant costs of nursing home care in Westchester and the metro New York region have a number of seniors considering divorce as a means of preserving their assets and obtaining Medicaid. With the average cost of the nursing home being anywhere from $385 to $425 per day in Westchester some of my senior clients have inquired as to whether divorce is a viable or necessary option. Fortunately, the availability of “Spousal Refusal” in New York often helps to dissuade the clients from seeking a divorce, especially, if Medicaid eligibility rather than personal reasons is the primary motivating factor. In simplest terms, “Spousal Refusal” allows the spouse of the applicant for Medicaid to refuse to contribute his or her assets and income towards the cost of care of the spouse applying for Medicaid. This will allow the applicant spouse to obtain Medicaid, however, the refusing spouse will then be susceptible to being sued for support by the Department of Social Services. The amount Medicaid can sue for is the amount they have expended for the cost of care which is approximately half of the private pay rate.

For couples who were married late in life, are in second or third marriages or have throughout their marriage maintained their assets separate and apart, the thought of having financial responsibility for the nursing home costs of their spouse is often troubling.

Clearly, if the divorce is being sought for Medicaid purposes alone, it is in my opinion an extreme measure that should be the last resort after all other available options and asset preservation techniques have been fully explored. The clients should thoroughly examine the pros and cons of the divorce, and its emotional and financial impact on them and their families.

If it is eventually determined that a divorce is to be pursued, the clients and their attorneys will need to know that not only will the divorce need to satisfy all of the requirements of the Domestic Relations Law, such as establishing one of the requisite grounds for a divorce. This may be difficult to accomplish because of the illness or disability of one spouse. Resolving these issues necessitates consulting a sufficiently experienced family law attorney. However, there are a number of underlying elder law issues that will need to be addressed.

One of the first issues that often rears its head, is the issue of the mental capacity of one of the parties to the divorce. As can be imagined, many of these cases involve seniors who are often very ill and disabled, and may have some form of diminished capacity. It will be necessary for the attorney to take all steps necessary to ascertain whether the client has the requisite capacity to understand the divorce proceeding. This would require consulting with the client’s physician, and perhaps obtaining a written opinion from the physician as to the client’s capacity. If it is determined that the client does not have the requisite capacity to participate in the divorce proceeding, it then may become necessary that an Article 81 Guardian be appointed for him or her. The Article 81 Guardian should be a disinterested third party and should not be the other spouse, because of the potential financial conflict of interest. The Article 81 Guardian could consent to a divorce, annulment or separation on behalf of the incapacitated spouse. However, the Article 81 Guardian would need to ensure that the rights of the incapacitated spouse have been protected and that adequate provisions have been made for the incapacitated spouse’s needs and well being pending eligibility for Medicaid.

Articles 81.21 and 81.22 of the Mental Hygiene Law, have been interpreted as being sufficiently broad enough to authorize the Article 81 Guardian to maintain a divorce action.

The continued financial support of the incapacitated spouse will be an issue of paramount importance in determining whether divorce is a feasible option. When it comes to the issue of financial support there are two statutes in particular that need to be considered by all parties and attorneys involved:

(1) Section 5-311 of the General Obligation Law which provides that except as provided in Section 236 of the Domestic Relations Law, a husband and wife cannot contract to relieve either his or her liability to support the other in such a manner that he or she will become incapable of self support, and therefore likely to become a public charge; and

(2) Family Court Act Section 415 which provides that the spouse or parent of a recipient of public assistance or care, or of a person liable to become in need thereof, or a patient in an institution in the department of mental hygiene if of sufficient ability, is responsible for the support of such a person. The Court has the discretion to require any such person to contribute a fair and reasonable sum for such support (child up to 21 years of age).

Both of these statutes illustrate the need that the divorce be a real, not a “sham” divorce, in the sense of the equitable (perhaps not equal) distribution of the assets. The well spouse needs to understand that the financial settlement must be fair and reasonable in light of the length of the marriage and other relevant factors. The parties should assume that Medicaid will closely scrutinize the financial settlement that was achieved.

My experience has been that the decision to pursue a divorce is in many cases abandoned, once the reality of the financial settlement of the divorce has been determined, and “Spousal Refusal” has been carefully reviewed as an option.

In conclusion, as the baby boomer generation begins to face these issues, the need for a slight modification of the marriage vows may be in the offing.

Anthony J. Enea, Esq. is the managing member of the firm of Enea, Scanlan & Sirignano, LLP of White Plains, New York. His office is centrally located in White Plains and he has a home office in Somers, New York.

Mr. Enea is the Immediate Past Chair of the Elder Law Section of the New York State Bar Association.

Mr. Enea is a Vice President of the Westchester County Bar Foundation.

Mr. Enea is the Vice President of the Columbian Lawyers Association of Westchester County.

Mr. Enea is a Past President of the Westchester County Bar Association.

Mr. Enea is a Past President and a Founding Member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). He is also a member of the Council of Advanced Practitioners of NAELA.

Mr. Enea focuses his practice on Elder Law, Guardianships, Medicaid Planning and Applications, Wills Trusts and Estates.

Enea, Scanlan & Sirignano, LLP