Tuesday, January 29, 2013
With the rise in second marriages, the use of prenuptial agreements has also increased. The use of prenuptial agreements can have a number of effects on long-term estate planning especially when it comes to the right of election and its affects on Medicaid eligibility.
Generally speaking, "a surviving spouse's right of election can be exercised whether or not the decedent left a will." How much a spouse can inherit automatically from the estate depends on the applicable state statute. These right of election laws protect a spouse in the event that the entire estate passes to other people. There are only a few ways that a spouse can successfully waive the spouse's right of election and this is one of them. However, according to New York Law Journal, "people often do not realize that this waiver can be treated as a transfer of property for Medical Assistance (Medicaid) eligibility purposes." Unfortunately, Medicaid rules state that any uncompensated transfers of property could subject the applicant to a penalty, which could well affect the applicant's eligibility. This situation can often produce unfair results for those to choose to elect against their spouse's estate.
See Ann-Margaret Carrozza, Surprising Effects of Prenuptial Agreements on Long-Term Care, New York Law Journal, Jan. 28, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.