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Will a Prenuptial Agreement Protect a Spouse's Assets From Medicaid?
I am a senior contemplating marriage. We will have a prenuptial agreement shielding “Separate Property Assets” from access by the other spouse. My question is, in New York State, if one of the spouses is in a nursing home and must use Medicaid to pay expenses, can Medicaid invade the healthy spouse’s “Separate Property Assets”? Will the prenuptial agreement protect the healthy spouse's "Separate Property Assets" from Medicaid invasion to pay the other spouse’s nursing home expenses?
We'd like to commend you and your bride for entering into a prenuptial agreement. All too many couples embarking on a second marriage do not have the conversations ahead of time necessary to enter into these agreements. Failure to do so can lead to misunderstandings and disagreements between the newlyweds and their families. The necessary second step is for both of you to execute new estate planning documents reflecting the understanding you came to in your prenuptial agreement.
Now turning to your actual question, you should be in good shape -- especially in New York State. In most instances, when one spouse needs long-term care and applies for Medicaid coverage, they both have to spend down their “countable” assets to approximately $120,000. But if the healthy spouse refuses to cooperate, the Medicaid agency is supposed to base its eligibility determination on the assets of the nursing home spouse alone. This is often referred to as “spousal refusal.” Spousal refusal is rarely used anywhere except in New York, where it is used regularly. Once you invoke spousal refusal, the Medicaid agency may sue you for spousal support on your wife’s behalf, but the prenuptial agreement should be a strong defense against any such claim. Even in states where spousal refusal isn't used regularly, spousal refusal is often used when the facts seem to support it, such as second marriages or true separation or abandonment between spouses.
A New York elder law practitioner could advise you whether the prenuptial agreement is ironclad or whether there are particular provisions you should include in it to strengthen its protection. To find an attorney near you, go here: https://www.elderlawanswers.com/new-york-elder-law-attorneys
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