Legal Issues Associated with Second Marriages

When I first started practicing elder law about twenty-five years ago, some of my clients were born in the 1900-naughts (1900-1909), many were born in the 1910-teens (1910-1919), and most were born in the 1920s. For whatever reason, most of these people were only married once and were married for forty, fifty, or sixty years, having married in their teens or early twenties.

The next wave of clients was born in the 1930s and early 1940s. They, too, were only married once and were married for many decades.

With the next wave of clients (the Baby Boomers), I have noticed dramatic shifts in lifestyle. One lifestyle change that I notice is the prevalence of second marriages. A high percentage of Baby Boomers are in second marriages by the time they reach their retirement age.

From time to time, clients will ask me if they should get married. Will a marriage have a negative or positive impact on their lives from an elder law perspective? Personally, I believe in marriage, and if two people want to get married, I think they should get married.

But from a purely legal perspective is marriage later in life a wise decision? I help many clients qualify for Medicaid benefits. Medicaid is a health payment plan for needy individuals. Unlike traditional health insurance, Medicaid will pay for most of the costs associated with long-term care.

Long-term care (such as care in a nursing home or assisted living residence) can cost a lot of money. On average, the cost of such care in Monmouth County is $12,000. That translates to $144,000 a year just for the room and board in the nursing home or assisted living residence. When you add in ancillary long-term care costs, a person could easily pay $150,000 a year for their care.

In order to qualify for Medicaid benefits, an individual must have a limited amount of assets ($2,000 or less) and insufficient income to pay for his care. When dealing with a married couple, the couple is treated as one economic unit. Assets owned by either spouse are counted against the eligibility of the spouse seeking to qualify for Medicaid benefits.

The Medicaid program permits the community spouse (the spouse who is not seeking to qualify for Medicaid) to retain certain assets. The community spouse can retain the home and about $155,000 in countable assets.

Let us assume that Mr. and Mrs. Smith own a home and about $600,000 in cash-type assets, assets that they have acquired over the course of their fifty-year marriage. Let us assume that Mr. Smith needs care in a nursing home. Mrs. Smith can retain her home and $155,000 of the $600,000 in cash-type assets. Medicaid would want Mr. and Mrs. Smith to spend the remaining $450,000 on Mr. Smith’s care. (Putting aside the fact that I could save most of that $450,000 for Mrs. Smith through proper planning, which is what Medicaid would expect Mr. and Mrs. Smith to do.)

Now if Mr. Smith were simply living (in sin) with Ms. Jones—two people who have been boyfriend and girlfriend for twenty years—none of Ms. Jones’s assets would count against Mr. Smith’s eligibility for Medicaid. Since Mr. Smith and Ms. Jones are unmarried, the Medicaid office cannot count those assets that Ms. Jones owns against Mr. Smith’s eligibility for Medicaid.

If Mr. Smith and Ms. Jones marry in their sixties—even if they keep their assets separate and apart from each other, even if they have a valid pre-nuptial agreement—the Medicaid office will treat them as one economic unit and hold all of Ms. Jones’s assets against Mr. Smith’s eligibility for Medicaid. Furthermore, one spouse is personally liable for the other spouse’s medical necessities, so if Mr. Smith does not pay for his care, the nursing home could sue his wife, Ms. Jones, for the cost of his care.

So, from a purely legal perspective, I see peril in marrying later in life. In the next article, I will write about the estate planning perils that I see in second marriages. What happens when Mr. Smith has children and Ms. Jones has children, but they want to benefit from each other in their Wills?