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 Rockland
- John and Betty were married for 25 years, then divorced
for 10 years before they found each other again. They were
living together as a happily unmarried couple when John was
diagnosed with a serious chronic illness. John sought my
assistance to ensure that his estate was protected for Betty
in the likely event that he needed nursing home care. The MassHealth regulations allow the community spouse to keep
assets of $109,560 and all excess assets beyond the $109,560
can be converted to an income stream for the community
spouse by purchasing a Medicaid-compliant annuity.
We could save John and Betty’s entire estate – if they were
married! Long-term relationships do not count. Prior
marriages do not count.
One option for couples like John and Betty is to get married
– fast! In many such cases, however, one member of the
couple may have dementia or otherwise lack the capacity to
consent to marriage, or it may not be an appropriate option
for other reasons personal to the clients, which was the
case with John and Betty.
If John needs nursing home care, therefore, the individual
rules will apply and he will not be entitled to MassHealth
long-term care benefits until he has reduced his assets to
$2,000 or less. If he transfers his assets to Betty, whom he
thinks of as his spouse and treats as his spouse, MassHealth
will disqualify him for benefits for a significant period of
time because Betty is not, legally, his spouse. Any senior
who is contemplating or going through a divorce should take
note.
You see, John continues to pay Betty courtordered alimony of
$1,550 per month, and Betty would not be able to get by
without these payments. If John needs nursing home care (as
anticipated) and applies for MassHealth, John will be
required to pay his income to the nursing home after
deducting allowable expenses such as his health care
premium. MassHealth does not allow a deduction for alimony,
however, so he will not be able to continue the alimony
payments to Betty at that point.
In this case, I was able to rely on the Divorce Decree to
protect the assets for Betty’s future security without
causing any disqualification of John’s MassHealth benefits.
I converted the monthly alimony payments to a lump sum,
which I calculated by using Betty’s life expectancy as
outlined in the actuarial tables used by MassHealth, to
determine how much John could transfer to Betty without
causing a penalty. I was also able to convert the ownership
of the real estate in a manner that better protected Betty
without causing a disqualifying transfer, by keeping the
percentage of ownership the same and changing only the way
the property was held.
John and Betty were fortunate that we were able to achieve
their goals by relying on the terms of the Divorce Decree,
but there is an important lesson to be learned from their
experience. It is imperative for any body going through
divorce later in life to consult with an Elder Law Attorney.
Have your proposed settlement agreement reviewed before it
is finalized, to ensure that it is structured in such a way
to protect your future security in light of the MassHealth
regulations and other benefits programs you may later be
eligible for.
Issues such as alimony must be viewed from a different
perspective later in life, when the possibility of an
ex-spouse being unable to pay due to disability or death is
more likely to become a reality. An Elder Law Attorney will
also help you to revise your important estate planning
documents in light of the divorce, to implement the changes
you wish to make in your appointment of surrogate
decision-makers and distribution of your estate.
Similarly, seniors who are contemplating marriage must be
aware that their assets will be fully countable if their
spouse requires nursing home care in the future. It is for
this reason that divorce is sometimes used as a strategy to
prevent impoverishment of the community spouse (although I
have never, and will never, recommend this strategy).
People fall in love. People fall out of love. While it is
certainly not romantic to let the potential of future
long-term care needs factor in to decisions about marriage
and divorce, it is essential to understand the consequences
when these life events happen later in life. If you are a
senior who is contemplating a marriage or divorce, consult
an Elder Law Attorney to ensure that you are fully informed.
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