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Elder Planning Isn't Just For The Elderly

To Love, Honor and Cherish – Until Medicaid is Needed

Sadly, the exorbitant costs of nursing home care in Westchester County and the surrounding region have a number of seniors considering divorce as a means of preserving their assets and obtaining Medicaid. With nursing homes averaging $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 clients from seeking a divorce, especially if Medicaid eligibility 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. This will allow the applicant spouse to obtain Medicaid. The refusing spouse, however, will then be susceptible to being sued for support by the Department of Social Services in the amount expended for the cost of care (approximately half of the private pay rate).

For couples that were married late in life, are in second or third marriages, or have maintained their assets separate and apart throughout their marriage, 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 an extreme measure that should be the last resort after all other available options and asset preservation techniques have been fully explored. Couples considering a divorce should thoroughly examine all pros and cons as well as the emotional and financial impact on themselves and their families.

If it is eventually determined that a divorce is to be pursued, it must satisfy all of the requirements of the Domestic Relations Law. 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. A number of underlying elder law issues will also need to be addressed.

One of the first issues to arise is often mental capacity. As can be imagined, many cases involve seniors who are very ill and disabled. The attorney must 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 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 guardian should be a disinterested third party and should not be the other spouse due to the potential financial conflict of interest. While the guardian could consent to a divorce, annulment or separation, he or she would need to ensure that the rights of the incapacitated spouse have been protected.

The continued financial support of the incapacitated spouse will also be an issue of paramount importance in determining whether divorce is a feasible option. The divorce must be a real and not a “sham” 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. Assume that Medicaid will closely scrutinize whatever financial settlement is achieved.

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. 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.

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Enea, Scanlan & Sirignano, LLP

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White Plains, NY 10601

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