Seniors Remarrying Should Take Financial Planning Seriously

Seniors who may remarry should take several planning measures before walking down the aisle. 

Estate Planning – Seniors that are remarrying should update their Wills or Living Trusts.  If a senior dies with a Will that predates the marriage, which obviously leaves out the new spouse, several unintended events can occur.  If the spouse that dies meant for the new spouse to have all property, to have the use of all property for life, or to have a certain amount of property, the spouse’s wishes will probably be unfulfilled. 

Under Alabama law, if the spouse is left out of a Will, the spouse can claim a spousal share of the deceased spouse’s estate.  If the spouse meant for the new spouse to have more property or to have unlimited use of property for life, the deceased spouse’s wishes will be fulfilled only if the other heirs agree to give the new spouse more property – a highly unlikely scenario. 

If the senior has a living trust that predates the new spouse (again, meaning the new spouse is not mentioned), there will be no mechanism for the new spouse to claim a share of the deceased spouse’s property unless the deceased spouse has property that is outside the trust and, as a result, falls under Alabama probate law. 

To prevent unintended consequences and to prevent family wars (which happen among the most loving of families), seniors should always update estate plans upon remarriage. 

Asset Protection – Medicaid Planning – Often seniors that remarry will keep their assets owned prior to the marriage separate.  This means separate checking accounts, separate savings, certificates of deposit, stock, land, and other assets.    Unfortunately, this offers no protection whatsoever in the event a spouse needs long-term nursing home care. 

Any couple may find themselves faced with applying for Medicaid as the average cost for nursing home care per month ranges between $5,500 and $6,000.  This can quickly exhaust savings.  When this happens, Medicaid will look at the couple’s assets.  Medicaid does not care how the assets are titled.  Medicaid does not care that the assets were owned prior to the marriage.  Medicaid looks at all assets belonging to both spouses.  Additionally, Medicaid does not care if there is a prenuptial agreement.  A prenuptial agreement will not protect the assets.   

This means that a spouse with savings that marries a spouse with few to no savings can find himself or herself using the majority of those savings to pay for nursing home care. 

Medicaid does allow the spouse remaining at home to keep some assets; however, it is still a very bitter pill to swallow if the spouse remaining at home must first pay over a sizable sum of separate assets for nursing home care. 

The solution to protect separate assets lies in proper trust planning.  The senior should go to an attorney familiar with Medicaid laws and regulations because many forms of trust will not work for this type of planning.  Specifically, a living trust that avoids probate will not work for asset protection purposes. 

If proper planning is done early enough, a spouse’s separate assets can be protected from Medicaid.  Ideally, the senior will consult with an attorney prior to the remarriage to determine the best course of action for protecting assets. 

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Melanie B. Bradford is an attorney focusing her law practice on elder law matters for clients in Northeast Alabama.  Articles are based on Alabama law.

This article is written for educational purposes only and is not to be regarded as legal advice.  Every situation is different and legal advice will only be given by Melanie Bradford after consulting with a client and learning all circumstances surrounding the client’s situation.  If you feel you need legal assistance, please feel free to contact Melanie Bradford. 

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