It may sound extreme, but when one spouse is expected to need long-term care, divorce sometimes is considered a way to protect assets of the spouse living in the community. “Spouses can become concerned that their assets may be eaten up,” said attorney Maureen Kinney.
“They may be concerned about what the community spouse may be able to keep if the other person needs Medicaid to pay for a nursing home.” Without a divorce, the spouse of a person living in a nursing home is allowed to keep the home, household furnishings, car, his/her retirement account and up to approximately $120,900 in other assets. Any assets greater than the $120,900 would have to be spent down to qualify for government assistance to pay for the nursing home care.
In a divorce, expect half of the assets, including retirement accounts, to go to the spouse in long-term care. The funds of that spouse then would have to be spent down to $2,000 in order to qualify for medical assistance.
By Maureen Kinney, La Crosse estate planning attorney at Johns, Flaherty & Collins, SC. For an estate planning attorney in La Crosse, call 608-784-5678.