Longtime Partners but Never Married (Part 2)

In my post last week I began to tell you about Bill and Mary.  Partners for 50 years, they never actually tied the knot.  Bill had a stroke and they are now faced with $14,000 per month in long term care expenses.  The home they live in is owned by Bill.  Mary is not on the deed.  Bill also owns most of the assets.

Mary was concerned for both Bill and herself.  How would she be able to pay for Bill’s care and also maintain her own standard of living – something she said she could not do on her income and assets alone.  Bill does not have long term care insurance so the only other option is Medicaid, however, I told Mary that he must spend down all his assets to less than $2000.  The house would need to be sold as well.  This obviously would be a problem for Mary since that house is her home.

I asked her about Bill’s mental capacity since the stroke.  She told me that while he needed help with all his activities of daily living and could not be cared for at home, mentally he was able to communicate and understand things.  I then told her there was an option.

If Bill and Mary were to finally be married, she would then be able to keep the home as an exempt asset since it would become the marital home.  The countable assets for both of them would then be totaled and divided in half.  Mary could keep 1/2 of the asset up to a maximum of $137,400.

Even beyond that, however, by getting married we could protect more of the countable assets through other strategies such as a Medicaid compliant annuity which would help Mary be able to afford to stay in the home and provide for her own care if and when necessary.  There are options to protect assets for a spouse that are not available if they remain single.

It all sounded great to Mary.  She said she would talk to Bill about it and get back to me.  A period of weeks then went by during which I did not hear from Mary.  Finally, I received another call that changed everything.  I’ll tell you about that call next week.