Does divorce to protect assets from one spouse to the other work?
Does divorce to protect assets from one spouse to the other work? My father recently moved to an assisted living facility in the state of NC, due to health reasons. His second wife is in a separate home which she purchased herself. Her attorney has advised her to divorce him and cut all ties or she will be financially responsible for his care in this mutual property state. She has considerable assets, while he has very little. Is there any other recourse? He is devastated."
Unfortunately, some people do get divorced to try to protect assets from long-term care costs. In your father's case, there's the immediate question of who's responsible for paying his assisted living costs. If he's paying privately -- meaning, without Medicaid assistance -- then his wife may be liable for those costs under North Carolina law. Divorcing him might get her out from under that responsibility.
If Medicaid pays for his long-term care costs, either at a qualifying assisted living facility or at a nursing home, the question of assets is a little different. Anything his wife had as a separate asset before they were married would not count toward his Medicaid eligibility for long-term care costs, and would not be subject to Medicaid repayment rules. So, whether she'd "need" a divorce would depend on how many of her assets are separate and how many are jointly held with your father.
Since they are already living apart, filing papers for a "legal separation" -- one step short of divorce – might also be possible to protect her assets. And even if she does file for divorce, there doesn't seem to be any reason to "cut all ties" with your father. She could go through the legal formalities of the divorce but keep the matter private between her and your father, and in every other way keep up her relationship with him.
Mr. Mathews made an excellent suggestion about keeping the divorce private. In this case there is no reason to outwardly change their relationship. What is being done is for lega/financial reasons, but in no way effects their love and care for each other. Many senior citizens live together as married when they are actually not.
The expert says:
"Anything his wife had as a separate asset before they were married would not count toward his Medicaid eligibility for long-term care costs, and would not be subject to Medicaid repayment rules. So, whether she'd "need" a divorce would depend on how many of her assets are separate and how many are jointly held with your father."
But I don't think this is true, at least in my state. I am told that even my prior assets protected by a prenuptual agreement will be counted by Medicaid.
My attorney has also suggested a divorce (state of Georgia)to protect my assets-which are not considerable. But he feels since this is a second marriage and we have no childred together, this would allow me to have some assets to live on when my husband has to go into a private pay alzheimer's care facility. He suggests a divorce when my husband has to go into care, to pay out all moneies that are in my husband's name for this care, and then this will allow him to receive Medicare for nursing home care. Does this sound like a sound plan? I do agree that these measures should be kept private. It is a shame the system has caused us make such decisions. Costs of care being the way they are.
It's my understanding that pamsc is correct ... no matter where one lives.
June: Is your dad able to understand the concept of "Medicaid divorce" -- that it's a divorce on paper and does not need to affect the emotional relationship between two people? Here's more on medicaid divorce: http://www.weinbergerlawgroup.com/Divorce-and-Separation/Medicaid-Divorce.html By getting a divorce, does wife #2 plan on leaving his life? Does she understand that this does not have to happen? Try to find a lawyer who works on this kind of issue with seniors it -- he or she might be able to better explain it. Good luck!!