Ask the Expert- Medicaid Asset Protection and Gray Divorce
Published: Fri, 03/15/13
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Ask the Expert- Your Elder Law Questions Answered by Evan H. Farr, CELA |
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Ask the Expert- Medicaid Asset Protection
and Gray Divorce Q. My 80 year-old father is currently in a nursing home for rehab after a stroke and not expected to come home, as he needs constant care (he can't stand, walk, feed himself, etc). The nursing home has told me that Medicare and my father's secondary health insurance through AARP will only pay for up to 100 days of rehab at the nursing home, and after that my mother will have to pay privately for his care at the rate of $369 per day, which is over $134,000 per year! My parents worked hard their whole lives and own their home and over $400,000 in financial assets, so I've been told my dad is not eligible for Medicaid. But the problem is that my mother is only 72, and she's quite healthy for her age, and she may need that $400,000, especially since she only get $748 a month from Social Security, and my dad only gets $2,200 a month from Social Security and a small military pension. Is there any way you can protect their assets and get my dad on Medicaid? One of my friends told me the only option would be for my mom to divorce my dad, but I know that my mom would not want to do that if there is some other way to protect their assets. Is there another way? My dad was in a car accident about 13 years ago, and was in the hospital in intensive care for almost a year, and Medicare and his AARP supplement covered everything. Then he had cancer about 8 years ago and Medicare and his AARP supplement covered all his chemo and radiation and everything else. I don't understand why his health insurance won't cover him now that he had a stroke. Please help! A. Our American health care system unfortunately differentiates between "health care" and "long-term care." In the US no one yet has a right to basic long-term care. Paradoxically, we do give seniors virtually universal coverage for health care. Treatment and surgery for health conditions such as heart disease, lung disease, kidney disease, bone disease, cancer, auto accidents, and hundreds of other medical conditions will not impoverish most seniors because Medicare and private health insurance cover these diseases, and we all pay our fair share for such coverage. But Medicare and private health insurance does not cover the treatment needed by those with chronic illnesses such as the after-effects of a stroke, or Alzheimer's disease, or other types of brain diseases causing dementia or loss of the ability to function independently. For these types of diseases, seniors must become officially "impoverished" under federal and state Medicaid rules in order to gain access to basic long-term care. Is this an ethical social policy that provides full coverage for most diseases but forces elders with certain conditions to become impoverished in order to gain access to basic long-term care? Is it a surprise that most seniors will want to look for legal ways to preserve the efforts of their lifetime in order to protect themselves from this unfair and arbitrary social policy? Medicaid asset protection planning is not about "cheating" or "gaming" the system; it is about preserving a client's dignity and self-worth in the face of an unfair and arbitrary social policy. The ethical scandal is America's public policy, not the desire of seniors to avoid poverty. You asked whether your parents have to get divorced. For most people, the idea of divorcing a loving spouse of many years is unconscionable; your mom might feel as if she were deserting her sick husband, and she will have to deal with the public nature of the divorce proceedings. Luckily, there are dozens of Medicaid Asset Protection strategies for married couples that do NOT involve divorce. Through the process of Life Care Planning and Medicaid Asset Protection (which our firm calls "Level 4 Planning"), we can help your mother protect ALL of their assets and quickly obtain Medicaid to pay for your father's nursing home care. We can even get most of your father's monthly income allocated to your mom. Level 4 Planning is focused not on preparation of specific documents, but rather on protecting the assets of your parents and obtaining Medicaid to help pay for his care. You mention that your father has a military pension . . . assuming he served at least one day active duty during wartime, we might also be able to get your father a benefit called Veteran's Aid and Attendance, which is a special type of Pension available for wartime veterans who served on active duty for at least 90 days. The assets that we protect can be used by your mother to maintain her quality of life and also, if it would benefit your dad, to enhance his quality of life in the nursing home by allowing her to purchase goods and services not covered by Medicaid: goods such as dentures, hearing aids, vision aids, and personal items; services such as enhanced medical care or private sitters to provide him with an enhanced level of care. Although divorce is one of the dozens of different Medicaid Asset Protection strategies, divorce is almost always the strategy of last resort. In a divorce, there is always the possibility that the judge will not order a division of property in accordance with the parties' desires or even in accordance with the parties' written agreement. A divorce may be worthwhile only if a judge grants all of the assets to the healthy spouse. Yet a judge may be unwilling to do so if he feels that the sick spouse with high medical costs deserves more. There is also the issue of incompetence. Getting a divorce is much more complex when a guardian has to be appointed by the court for the spouse who is no longer competent. Legally, it would be the guardian's duty to act in the best interest of his client only and he or she might not be as worried about the best interests of the healthy spouse. If this is the case, it could be difficult for the couple to obtain their desired financial outcome. Divorce can also have unwanted practical consequences for pensions, Social Security benefits, taxes, insurance, estate law, medical decision-making, even hospital and nursing home visitation rights, among other things. The bottom line is that we can protect ALL of the assets of your parents without forcing them to get a divorce. The Fairfax Elder Law Firm of Evan H. Farr, P.C. helps couples like your parents obtain Medicaid assistance and Veterans Aid and Attendance benefits without having to divorce or deplete their life savings. With proper planning, a spouse who is able to stay at home can retain all of the couple's assets and most or all of the income while Medicaid takes care of the nursing home. We aim to ensure that the spouse who is remaining at home is able to maintain his or her dignity and standard of living. Read more about the services we offer to help couples in similar situations, then call us today at 703-691-1888 for a free consultation.  |
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