Dear Bob,
No, prenuptial agreements do not protect assets from Medical Assistance – the assets will be treated as if there is no prenuptial agreement. Another name for these agreements is “antenuptial” agreements.
A prenuptial agreement is a contract between you and your wife about how your assets and other matters will be handled in case you get divorced. It has nothing to do with Medical Assistance. Medical Assistance is a state-federal funded program that helps pay for long term care if you become eligible for it. You become eligible when your assets are below the asset eligibility limit – the amount you can keep and still be eligible for Medical Assistance.
Whether or not your hunting land and/or your wife’s cabin will be counted as an asset in determining eligibility for Medical Assistance will instead depend on those assets’ “availability” to you and/or your wife. For example, if you are the sole owner of the hunting land, the county will count it. Assets that you own individually and/or with your wife will be counted because there is no legal reason why you and your wife can’t sell them. If your wife’s cabin is in her sole name, it will be counted. If your assets are over the eligibility limit (in 2022, $3000 for your wife and $137,400 for you as community spouse, for a total of $140,400), you and your wife will have to decide which assets to liquidate (e.g. sell real estate) in order to reduce your assets. If you had added your children onto the title to the hunting land, the land is not available, because the county can’t force the children to sell their interest. However, if you gave the interest in the land to the children too close to when you and your wife applied for Medical Assistance, the county will do an asset transfer penalty analysis, which will result in your wife not getting Medical Assistance for a period of time. There are ways to deal with an asset transfer penalty, but this article space is too short to answer in depth. Four main ways to deal with transfer penalties are to get the asset back; to dip into the assets that the community spouse (you) can keep to pay for your wife’s care during the penalty period; the children pay for the care during this period; or ask the county for a hardship waiver. The prenuptial agreement does not change the Medical Assistance rules.
Note: Homestead property is not counted because a protected person lives there (you and/or your wife).
The Medical Assistance rules are designed to help couples preserve at least some of the assets. However, if you find that the rules don’t preserve the assets to your liking, another option is to get divorced. This can be complicated, so it is best to consult with attorney(s) who are familiar with both Medical Assistance and family law.
