A number of times I've been approached by happy family members telling me about an elderly relative who, at age 75, 80, or 85, is getting married and Isn't that teriffic? Well, I suppose it is a happy event, but . . .

Unfortunately, the likelihood that a spouse will need nursing home care increases dramatically in later years. And the spouse who continues to reside in the community is legally responsible for paying the costs of nursing home care for the other spouse, regardless of how long they have been married! As you know, those costs can easily exceed $5,000 per month, for a national average nursing home stay of 2.5 years. That's $150,000.

Now the spouse at home may be able to protect a certain amount of money and get the spouse in the nursing home to qualify for Medicaid, which will indeed pick up the nursing home bill. In Colorado, that amount is currently $99,540, plus the house, car, and personal property. But if the couple has a total of, say, $400,000, and let's say most of that came into the marriage as the savings of the healthy spouse, then the healthy spouse will only be able to protect $99,540 of his or her savings, and all the rest may have to be spent down on the nursing home spouse's care.

Well, why can't they just sign a pre-nuptial (pre-marital) agreement? Typically, such an agreement states that each spouse is free to do what they want with the assets they brought into the marriage. Some such agreements even specifically state that neither spouse is legally obligated to pay for the long-term care of the other spouse. Unfortunately, the Medicaid laws of most states simply brush these agreements aside and act as if it were never signed. So, while the pre-nuptial contract is completely enforceable and legal for all other purposes, it is useless for Medicaid planning purposes.

So is there nothing the happy couple can do to protect themselves? Short of staying single and "living in sin," each partner might consider establishing an irrevocable trust and transferring all but $100,000 into such trust. That way, no matter which spouse goes into the nursing home, only the money outside the trust will be at risk. However, a transfer into such a trust could result in a period of disqualification from Medicaid, depending on how it is drafted by the attorney, so this needs to be approached very carefully.

In any event, a word to the wise. As some of my clients say, "It would be so much simpler if we didn't have any money!"