When one spouse needs long-term care, it can be a significant drain on the couple’s assets. There have been situations in which long-term care needs eat up the money people were saving for retirement.
Of course, once a couple’s assets are low enough, they can just get Medicaid to cover the costs. However, that number in 2012 was $115,640 for both people. Couples with significantly more assets than that could lose nearly everything on the way down to $115,640.
One option is to get divorced. When the assets are split, the person who needs the care still has to get down to the Medicaid levels for a single person, but the ex-spouse can keep all of his or her assets.
For example, if a couple has $1,000,000 in assets, they’d lose $884,360 before they’d be at $115,640 and Medicaid would pay. If they got divorced and each person got $500,000, though, one person would get to keep $500,000 and the other wouldn’t lose nearly as much. The divorce would protect half of the estate.
It is worth noting that you can be declared ineligible if you simply sign all of your assets into your spouse’s name and then get divorced. A roughly fair split may be necessary, or the officials could see the transfer of assets as a gift. Therefore, divorce typically can’t be used to unfairly protect all assets.
Medicaid caps and limits do change, so be sure you know all of the ins and outs of the process before considering any drastic measures. If you do decide to get divorced, though, be sure you also know how to do it in a legal fashion that won’t make you ineligible for care.
Source: Aging Care, “If I divorce my husband, will he be eligible for Medicaid?,” K. Gabriel Heiser, accessed Nov. 19, 2016
