Many clients who are married are faced with nursing home placement for their spouses. If the spouse in the community has assets in excess of the Community Spouse Resource Allowance (CSRA), presently set at $128,640.00 for 2020 the Department of Children & Families (DCF), will reject the case. While there are many planning opportunities available in Florida, qualifying for Medicaid becomes increasingly difficult if the excess assets are very large.

Typically, clients, facing the situation of a spouse being admitted to a nursing home with assets greatly in excess of the CSRA, may consider a divorce in order to protect his/her assets. Another option is “Spousal Refusal,” which allows the Community Spouse to retain all of the assets without filing for divorce. While this seems to solve the dilemma of having to file for divorce, it opens up another problem; that is, will the State of Florida file a lawsuit against the Community Spouse for support?

Currently, the State of Florida does not file support actions against the Community Spouse when Spousal Refusal cases are filed with DCF. In other states, such as New York, the Attorney General files such actions against the Community Spouse in a high percentage of cases. Although the law is different in New York, it is not inconceivable that Florida could start filing such cases in the future.

On the other hand, if the Community Spouse files for Divorce instead, a Family Court Judge might award some of the assets to the Institutionalized Spouse, which would defeat some of the benefit of a divorce. However, if the applicant and his/her spouse have entered into a Pre or Post-nuptial Agreement, then a divorce should not yield a re-distribution of assets between the spouses. This could work out especially well if the Community Spouse had most of the assets.

So faced with the choice of Spousal Refusal or Divorce in the case of a Pre or Post-nuptial Agreement, which is the better choice? If Spousal Refusal is the strategy to be used, the risk is always there that the State of Florida may decide to file an action for support. On the other hand, if a divorce is obtained, the time it takes to get the divorce may cost the Community Spouse thousands of dollars in the nursing home.  Also, DCF may not accept the divorce, if the order is entered right before a Medicaid application is filed. They may look at the divorce as a “sham” and fail to recognize it.

In conclusion, while Spousal Refusal and Divorce may allow the assets of a married couple to be shifted to the Community Spouse permitting the Institutionalized Spouse to qualify for Medicaid, there are always potential risks.