When illness strikes, you do not usually think of legal relationships. But when a spouse needs serious care and is married to a second wife or husband, family relationships can bring with them unexpected problems and conflicts — both for the second spouse and for children by a prior marriage. This is what sometimes happens.
Suppose a spouse cares for her husband as long as she can at home. How long this continues varies widely and could go on indefinitely. Frequently spouses — even spouses who themselves have medical problems — take almost heroic measures to keep their husband or wife at home. Even then there can be a time when it is no longer possible. If it takes two people to lift someone from a bed, if a spouse wanders from the home and cannot find his or her way back, these are all disturbing issues that may mean that care at home is no longer possible.
Sometimes when a parent moves to assisted living in a dementia unit or to a nursing home, adult children cannot believe their parent cannot be sustained properly and safely at home.
At a monthly rate for nursing care in this area of about $12,000 to $14,000 per month, without planning and without using the Medical Assistance rules for spouses which are referred to as the “spousal impoverishment” rules, the spouse at home could take a very serious financial hit in a relatively short time. Without obtaining specialized legal help, she or he might never recover and could need help herself.
This can be when understanding is needed. An adult child might feel the move to personal care or nursing home is needlessly squandering money that would otherwise be an inheritance. Often with second marriages, each spouse leaves his or her estate primarily to children by a prior marriage. If those funds are spent to sustain the spouse at home, children need to understand there might not be an inheritance but their parent is being cared for in the best way possible under the circumstances. It is not an easy decision to make and it demands cooperation among everyone — the second spouse and the children by a prior marriage.
If you are dealing with a Medicaid certified nursing home, the Medicaid rules require certain assets to be moved out of the name of the spouse who needs care, or that person will not receive benefits. As to the house, although it does not have to be transferred to the spouse at home, if it is not and that person should die, the jointly-owned house would be inherited by the spouse in the nursing home and the government would claim under a program known as estate recovery against his estate for the amount the government paid.
There are other oddities. Prenuptial agreements are disregarded when it comes to Medicaid. Countable income except for personal income of the spouse at home and retirement funds such as IRA’s, 401(k)’s, are included in the Medicaid calculation for the spenddown. Without additional planning, a spouse can keep the house, a car, some other exempt assets and a certain amount in assets known as the “spousal share.” That amount could be increased with some planning. The income of the spouse in the nursing home will usually go to the nursing home.
Recognizing the complexity of planning, a spouse who is confronted with long term care for a husband or wife requiring care needs to develop a strategy before funds run low. To do this she really needs to consult with an elder law attorney who is very familiar with the Medicaid rules.
It is understandable that children by a prior marriage could misunderstand the complexities of planning. If good communication has been maintained over the years, children by prior marriages might ideally be included in the planning process so that they know what is happening and why.
Understanding the risks and benefits of remarriage, both emotional and financial, is important both to the couple and to their adult children.
Janet Colliton, Esq. is a Certified Elder Law Attorney and limits her practice to elder law, retirement and estate planning, Medicaid, Medicare, life care and special needs at 790 East Market St., Suite 250, West Chester, Pa., 19382, 610-436-6674, email@example.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long term care needs. Tune in on Wednesdays at 4 p.m. to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care.