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By John M. Bigler This month I will discuss an ethical issue, divorce and how it affects seniors. Although some may be offended by the content of this article, Išve been approached a number of times by seniors, in this community as to how divorce can be beneficial to them. Here are some answers:
The couple would then know that only those assets left in the name of the ill spouse would be at risk for medical costs. Although the divorce would be effective, it was a particularly harsh planning tool especially for the ill spouse who not only had to face an impending nursing home stay, but also had to deal with the fact that they were being divorced by their spouse of many years. Even though the divorce was just on paper, it could still result in emotional turmoil. Fortunately, in 1989 the spousal impoverishment law went into effect in New York and with it came spousal refusal. In many cases, no longer was it necessary for a spouse to protect assets by considering a divorce. Now, a spouse could simply sign a statement refusing to contribute their assets to the medical costs of an ill spouse. Additionally, there are unlimited transfers permitted from one spouse to another without any period of ineligibility being caused for institutional care.
As I have indicated in recent articles, there are problems with spousal refusal. The local Departments of Social Services have become increasingly more aggressive in pursuing the stubborn spouse. Liens could be attached to the estate of the spouse for medical costs of the other spouse and recovery actions could be brought against the spouse during their lifetime. For this reason, many seniors still inquire as to the possibility of divorce. In some extreme circumstances, divorce may be considered. Typically a younger couple might consider it because they do not want an uncertain financial future hanging over the head of the well spouse who may still be responsible for children in the home. That spouse may want the divorce so as to finalize the finances; even though a certain amount of assets will need to be left in the name of the ill spouse, the balance of assets will be protected from liens and lawsuits. Obviously, both spouses need to be in agreement and both spouses need to have a clear understanding of the ramifications of a divorce. Both the ill spouse and the well spouse need to be represented separately by attorneys. If one attorney attempts to represent both parties, it could make it easier for the Department of Social Services to challenge the divorce and certainly the attorney would have to face serious ethical questions. Although it may be tempting, the divorce settlement can not provide that all of the assets of the couple will go to the well spouse. Such an agreement violates public policy and could be voidable if challenged. Therefore, a reasonable amount of assets needs to be put in the name of the spouse who is facing medical expenses. Commonly it is asked why the divorce would not take place in New York, but unfortunately New York is still one of the few states that requires grounds for a divorce. This means that in most cases one spouse has to allege some fault on the part of the other spouse. The one exception is if the spouses have been separated pursuant to an agreement for at least one year. Many couples do not feel that they can wait that one year and will look to another jurisdiction. Enlightened New York Thankfully, as the result of the more liberal planning laws for spouses, such extreme measures as divorce have become rare in New York. Hopefully, the State of New York will not enforce a short-sighted policy and aggressively pursue recovery against the spouse who exercises the right of spousal refusal. For the last ten years, New York has been the most enlightened state when it came to planning for husbands and wives. As a result the emotional burden on a couple faced with catastrophic illness has been greatly reduced in this state as opposed to others. Should more aggressive policies be undertaken by local counties, seniors may once again be forced to consider more extreme methods of planning. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
Divorce is becoming more and more common and seniors are no exception to the rule. However, seniors get divorced for other reasons than discord in the marriage. Prior to 1989 and the enactment of the Federal spousal impoverishment law in New York, many seniors considered divorce as a way for the well spouse to avoid the financial burdens imposed by the illness of an ill spouse. It was common for the couple to agree on a financial settlement as part of a separation agreement which would leave the ill spouse with limited assets. The well spouse would retain the majority of assets in their name and then take the separation agreement to a jurisdiction such as the Dominican Republic where a divorce could be obtained quickly.
This is a major advantage as opposed to transfers to a third party, such as a child or an ex-spouse. Therefore, it is actually advantageous for a couple to be married and there have even been instances in the past ten years where marriages have been taken place, in part to allow transfers without penalties.