There is an income-allowance drawback involved with spousal refusal Medicaid planning. Essentially, Medicaid says you “can’t have your cake and eat it too”. Generally, to avoid impoverishing the community spouse (who is not applying for Medicaid), the community spouse may be entitled to a portion, or all, of the
Medicaid Spouse’s income. This income diversion is referred to as the Minimum Monthly Maintenance Needs Allowance (MMMNA).
However, DCF takes the position that if the healthy community spouse is unwilling to “support” the spouse receiving Medicaid by deploying the “Spousal Refusal” strategy, then the community spouse will not be able to access the MMMNA income supplement from the Medicaid spouse that they would otherwise be
entitled to receive.
Essentially – if Spouse X refuses to share assets with Spouse Y, Spouse X then will have to do without any additional income from Spouse Y.
Since we cannot guarantee that a future Medicaid agency won’t file suit against the spouse who refuses to support the one requiring Medicaid (although we still maintain the risk is small) and some community spouses cannot do without the Medicaid applicant’s income, there is another alternative: divorce.
Divorce Alternative for Medicaid in Florida
Using an amicable divorce as a Medicaid planning strategy requires hiring two different attorneys. If everything is agreed upon, a judge would then order the allocation of assets (e.g. most to the community spouse) and can even order agreed-upon alimony payments (from the Medicaid spouse to the community spouse). Medicaid must respect a judge’s order.
Another positive aspect to an amicable divorce in a Florida Medicaid planning context is that it would allow the former spouses to live with each other if only one needs Medicaid (if that Medicaid applicant is able to live at home).
The process of getting Medicaid can be extraordinarily complex. It is best to consult with an attorney who practices in Medicaid Law.
Diana Mangsen focuses her practice as an elder law attorney in Clearwater, Palm Harbor, Largo, Dunedin and the Tampa Bay area.
For more information, visit our website at
https://www.mangsenlaw.com/
or call (727) 888-6282.