Medicaid Divorce in New Jersey
A Medicaid divorce is not always undertaken because a married couple can no longer stand the sight of each other. In fact, it is often done to ensure that the affected partner will receive the Medicaid benefits necessary for their long-term health treatment without bankrupting everyone involved. Healthcare and long-term care are prohibitively expensive, with nursing homes charging thousands of dollars on a monthly basis. The astronomical cost of healthcare has led older couples to divorce as a form of estate planning to avoid becoming destitute. But it is far from easy to embark on this journey. The complexities, risks, and eligibility regulations make getting a Medicaid divorce nearly impossible without an experienced attorney’s help. Imagine going through the divorce process on your own only to find that you are not eligible for Medicaid and the care you desperately need.
At the Montanari Law Group, our divorce attorneys offer personalized support to clients in Millburn, Caldwell, Haledon, West Orange, Paramus, Woodland Park, Ridgewood, and throughout Northern New Jersey. With an office conveniently located in Little Falls, New Jersey, we handle a wide range of issues, including divorce cases involving Medicaid. By helping you navigate the divorce process and understanding your specific needs as it relates to Medicaid planning, we can offer the solutions you require. Ensuring that you are legally protected, while providing for your medical treatment and financial future, working to resolve your divorce case, and navigating the complexities of having an ill spouse, can seem like an insurmountable set of challenges. But you don’t have to handle your Medicaid divorce alone. Contact us today at (973) 233-4396 for a free consultation and discuss your options with an attorney on our team.
Protecting One Spouse’s Medicaid Eligibility Through Divorce
Long-term Medicaid is for residents 65 years of age and older. There is institutional or long-term care Medicaid and Home and Community-Based Services (HCBS), which are also long-term. Medicaid covers adult foster care homes, assisted living facilities, nursing homes, and in-home care for seniors who are too frail and need help in their day-to-day lives. To be eligible for coverage, there is an asset limit of $2,000. The income limit is $2,829 monthly for single-person care. For a married couple, with both spouses applying, the asset limit is $3,000, and the income limit is $5,658. For a married couple with one applicant, the applicant can earn up to $2,829 with an asset limit of $2,000, while the non-applicant spouse has an asset cap of $151,140. For long-term care, all of the beneficiaries’ income must be used to pay for their care. Almost all of an applicant’s income is attributed to the income limit. This includes wages, alimony, Social Security Disability, stock dividends, Social Security Income, and private pension funds.
When a couple files for divorce, it can reduce the applicant’s assets sufficiently as to make them eligible for Medicaid because only the assets that remain in their possession are counted by Medicaid. This makes the division of marital property a good option. Because New Jersey is an equitable distribution state, the divorce settlement can stipulate who gets what. The courts frequently acquiesce to the wishes of both parties if they agree. The problem is that a family court judge may not always agree to the proposed settlement, throwing a wrench in the works. Each spouse should have their own lawyer to guarantee that everyone’s rights are protected and there are no conflicts of interest. Planning your estate to establish Medicaid eligibility while undergoing the divorce process is incredibly complex and requires knowledgeable, precise treatment.
Medicaid is a valuable resource for those who require long-term care, but the inscription process and eligibility requirements can be perplexing. A Medicaid planning professional and an experienced attorney can increase your chances of acceptance by providing strategies to help you during your divorce. They can carefully structure the division of assets by establishing trusts and other financial shelters. With their guidance, you can explore the available financial solutions and the impact of financial decisions such as spousal support on your Medicaid eligibility.
Understanding the Financial Consequences of Divorce Involving Medicaid
The division of marital assets can affect Medicaid eligibility. Most couples’ largest asset is the family home. The home’s equity is not affected by Medicaid eligibility when it is less than $1,071,000. A rookie mistake couples often make is selling the home. It is a marital asset whose sale will be recognized by Medicaid as a countable asset. As long as the house is being used by the applicant, or there is an intent to return within 6 months, it is best not to sell it. The transfer of assets from the applicant spouse to the non-applicant can be a detriment to the eligibility process because New Jersey has a “look-back period.” This is the 5-year span prior to applying for Medicaid, where the applicant’s assets are tracked. This is done to make sure no assets were given away or sold under fair market value. A violation of this rule could result in temporary ineligibility. Additionally, alimony is considered a countable asset, so a non-applicant who receives alimony could go over their limit.
When an applicant is ineligible because they have too many assets, there is a Medicaid Spend-Down process wherein they can spend non-exempt assets before the Look Back Period. Examples of these expenditures include personal loans and credit card balances, house renovations, vehicle repairs, annuities, and a formal care agreement. This agreement is between the elderly recipient and a relative or close friend who will care for them in their home. The contract and financial compensation should be handled by an attorney
Considerations for Long-Term Care and Medicaid in New Jersey
Medicaid is not an insurance plan. It can be used to provide long-term care on a needs-based spectrum. Financial benefits such as Social Security or pensions must be used to pay for a patient’s care, excluding a small stipend for personal expenses of $50-$200. Once the Medicaid recipient has passed, their house and other assets will be taken by Medicaid to cover some of the costs associated with their care. In order to avoid these kinds of issues, it is imperative that a Medicaid Planning Professional and an attorney discuss all of the possibilities with you and your spouse.
Discuss Your Options and Alternatives with an Attorney when Considering a Medicaid Divorce in NJ
A Medicaid divorce is advantageous for some, but there are viable alternatives that may not require a legal split. You need sound financial and legal advice before making any decisions. At the Montanari Law Group, our knowledgeable attorneys will discuss your options and answer your questions about Medicaid Divorce in New Jersey. We treat every case as a unique opportunity to make a difference in the lives of our clients. Our firm proudly assists clients in Short Hills, New Milford, Little Falls, Wanaque, Montclair, and Franklin Lakes, as well as throughout Northern New Jersey. Let us help you today by calling (973) 233-4396 for a free consultation.
