Medicaid Divorce: Preserving Benefits, Minimizing Spend-Down, Protecting Assets, Electing Spousal Refusal

When family law, estate planning, and elder law collide, an attorney faces ethical considerations and traps. Frequently, clients and their respective children and step-children fear the depletion of one divoring parent's assets for an ailing spouse's nursing home expenses. Attorneys advising these families must possess an understanding of not only divorce law, but also Medicaid regulations and trust considerations to navigate these complicated divorces.

Gifting assets to children will create a period of ineligibility before the spouse can qualify for Medicaid. Will the division of assets under a Medicaid divorce also be considered a disqualifying transfer? In a Medicaid divorce, the parties transfer a disproportionate amount of marital assets to the healthy spouse, minimizing spend-down to maintain the healthy spouse's quality of life, while obtaining Medicaid benefits for the spouse requiring long-term care assistance.

Counsel and their clients face a number of difficult questions: Will a family law judge approve a divorce with a substantially disproportionate division of assets? Is it ethical? Is a post-nuptial agreement an alternative? Are irrevocable trusts a planning opportunity? What are the other options?

Listen as our authoritative panel discusses the complexities of Medicaid divorce and trust considerations.