I recently met with Penny, a distraught spouse. Penny and her husband, Nick, were in the middle of a divorce when he suffered a stroke and was admitted to a skilled nursing facility. Penny was told she would have to pay for Nick’s care and she thought she would have to use all of her assets to do so. Understandably, she was angry and afraid and wanted to know how quickly she could divorce him.

In order to determine the best strategy for protecting Penny, we took a look at their financial situation:

Total Asset


House (In Penny’s name)


Car (In Penny’s name)


Joint Checking Account (Penny + daughter)


Joint Checking Account (Penny + son)


Joint Checking Account (Penny + Nick)


Joint Checking Account (Penny + Nick)


Penny’s IRA


Penny’s Roth IRA


Stocks (In Penny’s Name)




Under Medicaid rules, there are some financial allowances for both spouses and some assets that are protected (such as the spouse’s home and retirement accounts under certain provisions), meaning that  all assets would not be lost to pay for skilled nursing care including:

Protected Assets/Allowances


House protection for Penny


Resource Allowance for Nick


Resource Allowance for Penny


Penny’s IRA (Exempt from Medicaid as long as required minimum distributions are made)


Penny’s Roth IRA (Exempt from Medicaid as long as an amount equal to what the required minimum distribution required is made)




Total Assets $344,000 – Less allowances $394,937 =  (50,537)

Penny and Nick’s combined countable resources are $50,537 below the allowable resource allowance. Therefore, Nick is eligible for Medicaid immediately without forfeiting any assets. Nick will actually have $3,233 in resources (from the checking accounts) while Penny will have all of the rest. If the couple continued with the divorce, the assets would be split and Nick’s half would be required to go toward his care before he would be eligible for Medicaid. Financially, given Nick’s need for skilled care for the rest of his life, they are much better off not getting divorced.

Penny was greatly relieved.

If you have any questions about the above material, or wish to speak to an attorney, please contact Pfalzgraf, Beinhauer & Menzies, LLP at (716) 204-1055. Pfalzgraf, Beinhauer & Menzies, LLP has offices located at 455 Cayuga Road, Suite 600, Buffalo, New York 14225.