More and more people are living together without marriage. This includes senior citizens.
This can create special problems for Medicaid.
If a couple marries, and then one spouse needs Medicaid, the assets of both (including assets that the other person brought into the marriage, that have always been separately owned) are subject to Medicaid spend down.
If a couple does not marry, this risk can be avoided. This does not mean that not marrying is necessarily preferable, or even simpler.
If an unmarried couple own any assets together, this can complicate things. Whether or not the couple own (or rent) anything together, there are a wide range of issues that likely will need to be decided if the couple ever decide to live apart, or if the couple ever has to live apart because one needs to go into a long term care facility. (See the earlier article titled “Domestic Partnership Agreements.”)
One of the major things that has to be considered, in a stable and caring long term relationship, is what is going to happen if one party needs to go into long term care.
It is possible that an unmarried partner could be voluntarily supported in long term care by the other partner.
It is perhaps more likely that there will not be sufficient money for this. Medicaid will then become an issue.
Jointly owned property can present critical issues at that point.
Paradoxically, property that is not jointly owned, and that is instead owned solely by the ill partner can also present critical issues at that point.
If a person owns a house jointly with an ill partner, and the partner goes into long term care, and ultimately qualifies for Medicaid, Medicaid will not be able to force the sale of the house so long as both parties are alive.
However, once one party dies, Medicaid will likely be able to force repayment.
If, for example, the Medicaid recipient dies first, Medicaid will then be able to force the sale of the jointly owned house. This could result in the survivor losing what he or she thinks of as his or her house.
Similarly, if the partner who is not on Medicaid needs to move while the Medicaid recipient is still alive - for example if the well partner needs to move to a single level home - Medicaid will get the Medicaid recipient’s portion of the sale price when the first house is sold. This will often leave the well partner with insufficient money to buy a suitable replacement dwelling.
On the other hand, if the house is owned by only one partner, and that is the partner who needs long term care and Medicaid, then the house will immediately be lost. If this is the home of the well partner, that can be traumatic. It can also be financially devastating for the well partner. This is likely not what the ill partner intended.
Trying to protect against such outcomes also raises other issues. As an example, while it is permissible to make a gift to a spouse, if you make a gift to a partner, you have created a period of Medicaid ineligibility that may extend for a very long time if you then make a Medicaid application within the look back period (which is currently five years). Thus, gifting an interest in a house to a domestic partner can create significant Medicaid issues.
None of these issues are easy to solve, but working with a skilled elder law attorney can at least help to ensure that such issues are spotted early enough that it may be possible to consider possible paths forward while various options are still available.
Steven A. Heinrich
Divorce & Custody
Wills, Guardians & Elder Law
- Wills, Trusts, and Probates
- Guardians and Conservators
- Elder Law
- When Should You See An Elder Law Attorney
- Substitute Decision Makers
- Overview of Guardianships, Trusts, and Health Care Documents
- Finances and Business
- Health Care Documents
- Guardianships and Conservatorships