Medicaid Divorce in New Jersey
For most couples, a divorce is the final outcome of a deteriorating relationship. For some people, however, divorce has become a viable financial planning tool that could allow a loved one with serious long-term disabilities to qualify for Medicaid.
The concept of filing for divorce to qualify for Medicaid might sound unusual at first. While uncommon, legally dissolving your marriage may help you or your loved one qualify for Medicaid when they might not be able to otherwise. An experienced divorce attorney can advise you regarding your eligibility to pursue a Medicaid divorce in New Jersey.
Marital Assets and Medicaid
The main reason why divorce could be a viable planning tool to obtain Medicaid in New Jersey is because an applicant might only meet the eligibility requirements if they are unmarried. This is due to the asset requirements that can come with Medicaid eligibility.
Before an applicant can receive Medicaid’s long-term benefits, they must establish that their assets and income fall below a specific level. Should they fail to meet this qualification, they will not be able to qualify for Medicaid benefits. This process is further complicated by the fact that there is a “look back” involved, meaning that eligibility is not determined by a person’s assets at the moment they file for benefits, but during the course of the entire period prior to filing.
In some cases, couples intending to seek Medicaid benefits will spend or give away their assets during a period known as a “spend down.” While a spend down might be a viable option for couples that have years to prepare, it is not ideal for anyone suffering a sudden and debilitating medical condition.
In these situations, divorce may be the best choice for one spouse to meet Medicaid eligibility. Eligibility requirements cover both income and assets, but marital income is rarely the primary issue. When a married person files for Medicaid benefits, only their personal income is considered during the means test calculation. Because their spouse’s income is not part of the equation, there is little reason to consider a Medicaid divorce based on income.
However, assets are treated differently in this process. Unlike income, all marital assets are considered in the calculation. For one spouse to qualify for benefits, both spouses would have to shed enough assets to meet the minimum requirements.
How Divorce Can Qualify You for Medicaid
Filing for divorce can reduce a spouse’s marital assets enough to qualify for Medicaid. By divorcing, a spouse that files for Medicaid can pursue eligibility using only the assets they recovered following the divorce. This makes the division of marital property central to this strategy’s success.
It is important to remember that there is no guarantee that the court will agree to split the marital assets in a way that allows for Medicaid eligibility. However, many New Jersey courts will give deference to what the parties desire when they jointly submit a proposed divorce plan to the court. Your divorce attorney can also work with an attorney that specializes in special needs trusts.
Contact a Seasoned Attorney About Medicaid Divorce In New Jersey
Divorce might seem like an extreme measure to qualify for Medicaid benefits. Unfortunately, it might also be your only option. This process is complex and can have unexpected consequences, and you should never pursue a Medicaid divorce without first speaking to a New Jersey attorney. Contact our office today to learn more about this unique option and determine if it is right for you.