Just Say No, or Spousal Refusal is applicable in situations where one spouse is living in a facility (either an assisted living facility or nursing home) and the other spouse resides in the community at home (“community spouse”).
How Spousal Refusal Works for Florida Medicaid
The Just Say No / spousal refusal medicaid planning option takes several steps:
- transfer all of married couple’s countable assets into the name of the community spouse only.
- After the transfer of assets, and prior to filing a Florida Medicaid application, the community spouse signs a “notice of spousal refusal” indicating his or her refusal to be obligated to pay for the Medicaid applicant’s care.
- The medicaid applicant then must sign, either individually or through a power of attorney, an assignment of support rights to the government, which in theory, allows the government to take the position that it could sue the community spouse to reimburse it for the amount it paid for the applicant’s care and support.
While no one likes the threat of a lawsuit, it should be comforting to know that Florida, to our knowledge, has never sued a community spouse who refused to make his or her assets available to the spouse who is receiving Medicaid benefits. Further, it is our belief, based on precedent, that Florida will not file such a suit. Our belief is based on the fact that in 1995, Florida abolished the common law Doctrine of Necessaries (which gave one spouse an obligation to financially support the other). So, as the law currently stands, there is no requirement for spouses to support one another.
While this is not a guarantee, and of course, the government could try to advance other theories, we believe that the government is unlikely to file suit. Politically, it would not look good for the government to sue an elderly person for care support.
Your elder care attorney will prepare all the needed spousal refusal documents (the notice of spousal refusal and assignment of support rights).
Spousal Refusal | Just Say No Medicaid Drawbacks
There is an income-allowance drawback involved with just say no / spousal refusal Medicaid planning. Essentially, Medicaid says you “can’t have your cake and eat it too” if utilizing Just Say No / Spousal Refusal: Generally, to avoid impoverishing the community spouse (who is not applying for Medicaid), the community spouse may be entitled to a portion, or all, of the Medicaid Spouse’s income. This is income diversion is referred to as the Minimum Monthly Maintenance Needs Allowance (MMMNA).
However, DCF takes the position that if the healthy community spouse is unwilling to “support” the spouse receiving Medicaid by deploying the “Spousal Refusal” strategy, then the community spouse will not be able to access the MMMNA income supplement from the Medicaid spouse that they would otherwise be entitled to receive.
Essentially – if Spouse X refuses to share assets with Spouse Y, Spouse X then will have to do without any additional income from Spouse Y as well.
Your Elder Law Attorney will be able to lay out the pros and cons of Spousal Refusal compared to other Medicaid Planning techniques.
Divorce Alternative to Spousal Refusal for Medicaid in Florida
Since we cannot guarantee that a future Medicaid agency wont file suit against the spouse who refuses to support the one requiring Medicaid (although we still maintain the risk is small) and some community spouses cannot do without the Medicaid applicant's income, there is another alternative: divorce.
Many of my clients have have been married for many years and the idea of a divorce is abhorrent. However, divorce in a Medicaid context, is only strategic. The divorce would only be through the state (not the church, not the synagogue or any other spiritual way).
Using an amicable divorce as a Medicaid planning strategy requires hiring two different attorneys (I work with several divorce lawyers who charge a low flat fee to get this done because there is no negotiation involved). If everything is agreed upon, a judge would then order the allocation of assets (e.g. most to the community spouse) and can even order agreed-upon alimony payments (from the Medicaid spouse to the community spouse). Medicaid must respect a judge's order.
Another positive aspect to an amicable divorce in a Florida medicaid planning context is that it would allow the former spouses to live with each other if only one needs Medicaid (if that Medicaid applicant is able to live at home).
To discuss whether Spousal Refusal in Medicaid context is right for you, and to discuss other medicaid planning options, please schedule a consultation today.