The Medicaid program aims to contribute to the dizzying cost of long-term care. However, before a couple can qualify, the regulations require that the assets of both spouses be counted for the care of a spouse, even if only one spouse needs the care. Marital agreements do not matter. Medicaid rules add up the assets of both spouses. Abigail would have the right to keep some of her property for her own use – but that would not be enough for her to maintain her standard of living, to pay for her retirement and to inherit enough of Abigail`s children. In this Elder Law Minute, Wes Coulson talks about whether a marriage protects a spouse`s property if he applies for Medicaid. Second marriages may need a marriage to protect children and save. We would like to congratulate you and your fiancée for entering into a marriage contract. Too many couples entering into a second marriage do not have the necessary discussions in advance to conclude these agreements. If this is not the case, this can lead to misunderstandings and disagreements between the bride and groom and their families. The second necessary step is to execute both new estate planning documents that reflect the understanding you have found in your marriage agreement. You and your new spouse may already have an estate plan. It may be necessary to update your succession planning to reflect the intent expressed in the marriage agreement.
Your new marriage will also be revoked from your current will. Nothing I had written about marital agreements – and I wrote a lot – prepared me to do mine. I knew the rules. High-level lawyers have taught me in interviews. But to understand emotions, you have to be there. Medicaid, funded by a combination of state and federal dollars, is only available if someone needs care and is impoverished. The rules vary from state to state, but in general you can only keep $2,000, which means that verification, savings, IRAs, 401 (k)s, stocks, bonds, investment funds, pensions, homes, cars, etc., must be issued at this level. A married spouse living at home may keep certain items such as the house (with a pledge), a vehicle, half of the savings ($115,920 maximum) and some income. Unfortunately, Medicaid does not comply with a marital agreement, which means that almost all assets are threatened, and you are playing on the health of the new spouse.
Tell them that your client is considering a remarriage and wants to protect the $3 million estate she brings back to the wedding. If you think a marital agreement will be enough to protect fortune, don`t think about the possibility of stroke, Alzheimer`s or even chronic arthritis, which causes a need for long-term care. Many people think that a prenup means that your spouse cannot access funds that are “protected.” While technically correct, Medicaid, the federal social welfare program that pays for long-term care as soon as a person is impoverished, does not honor a prenup.
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