Under federal law and Medicaid regulations, states are allowed to recover from the estate of a Medicaid recipient, over the age of 55, as reimbursement to the state for Medicaid benefits paid on the behalf of the recipient. States are also allowed to institute actions to recover against spouses in instances of spousal refusal.
Spousal refusal occurs when one spouse is being cared for in a facility (“the institutionalized spouse”), while the other spouse continues to live at home in the community (“the community spouse”). Upon application of the institutionalized spouse for Medicaid benefits, the community spouse quite simply refuses to contribute his or her income or assets for the care of the institutionalized spouse. Under federal law though, the local Department of Social Services (DSS) may institute a lawsuit against the refusing spouse to recover the cost of care.
In the past, DSS rarely initiated such lawsuits and spousal refusal was often utilized as a Medicaid planning tool in New York. With the present budget crisis, DSS is getting much more aggressive about pursuing refusing spouses. We have seen an increase in actions against refusing spouses and this something that must be taken into consideration and weighed against the other benefits of spousal refusal.
There are alternative planning options that can still protect assets. Shamberg Marwell Hollis Andreycak & Laidlaw, P.C. offers free initial consultations. To discuss Medicaid planning options, contact SMHAL at (914) 666-5600 or email firstname.lastname@example.org.