During thirty years of practice, I have encountered clients seeking a divorce from all stages of life: newlyweds, who quickly found out they were incompatible; young adult parents torn apart by the trials of parenthood, forty-somethings going through a mid-life crisis; even seniors who remained married for the sake of their children but no longer could coexist harmoniously in an empty nest. Each of the clients reached a point in their lives where they made a conscious decision to divorce due to irreconcilable differences.
One would think potential clients would not include happily married couples/soulmates, ideally suited for each other, inseparable for life, bound by unconditional love. If you are not personally aware of such instances, these couples appear on the news and in social media from time to time: the New Hampshire couple married forty-four years that died from COVID-19 minutes apart while holding hands; the inseparable English couple who died minutes apart after sixty-five years of marriage; or the Michigan couple, both ninety years of age, who passed away minutes apart after 70 years of marriage.
It is unfathomable to process the extreme circumstances that would force the aforementioned couples to contemplate divorce. Personally, I experienced those extreme circumstances when my wife was hospitalized for 556 consecutive days with her medical bills exceeding six million dollars. I cannot adequately convey the gamut of emotions I experienced upon opening an Explanation of Benefits from the health insurer which read “Total bill $1,192,654.04, Amount You Owe – $1,090,550.04.” Goodbye house. Goodbye savings. Goodbye children’s college funds! Fortunately, as an attorney adept at appeals, these options never came to pass; however, for others, extreme measures impact couples every day.
For a couple facing financial devastation when one spouse is facing a long-term serious illness, disability, or entry into an assisted-living facility, some couples obtain information regarding divorce and how it impacts their medical and financial lives separately. Even with excellent health insurance coverage, a long-term hospitalization can result in financial hardship with mounting deductibles, co-pays and uncovered charges. However, most health insurance plans do not include coverage for assisted-living facilities. Further, if the long-term hospitalization results in a loss of employment and/or health insurance benefits, the reduced available income and the cost of COBRA coverage can make one’s finances difficult to manage. Our ten months of COBRA coverage cost over $4,500.00 each month. Should both spouses become unemployed, as often occurs because the patient needs their caregiver, the circumstances worsen.
Becoming eligible for Medicaid can help alleviate some of these concerns, but Medicaid is a needs-based health care program, only eligible to those that meet the strict financial criteria. Medicaid eligibility is determined based upon the total income and assets of the married couple. Remaining married can render one Medicaid ineligible if the assets exceed the threshold. Assets would need to be spent on permitted purchases to lower the total to the threshold. While changes in the law do preserve some rights for the healthy spouse to prevent the spouse from becoming destitute, the process can result in a significant change in lifestyle as assets are expended for medical costs.
Through a Medicaid divorce, the concept is that assets are awarded to the healthy spouse who would no longer be considered on the Medicaid application and would therefore be “preserved’ for the healthy spouse. In New Jersey, where our statute provides for an “equitable distribution” of marital assets, the healthy spouse could be awarded an equitable share of the marital assets, which would then no longer be considered assets of the ill spouse. Other considerations, such as alimony, may also factor into the overall global divorce as well.
As with all divorce matters, any approach must be carefully reviewed with an experienced family law attorney to achieve the intended goal and a favorable outcome given the circumstances. This rule becomes even more important when the circumstances are extreme. Not all cases fall within the same category. I know first-hand the feelings of hopelessness that arise during these extreme circumstances and how you will desperately look for help, be it from a skilled surgeon, a financial planner, or an attorney, looking for a solution to the monumental problems that have arisen. The desperation is compounded the longer the search continues and many times that solution cannot be found.
