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Published Sun, Oct 16, 2011 02:00 AM
Modified Sun, Oct 16, 2011 06:23 AM

State law might trump a prenup

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- Correspondent
Tags: business

Q. In light of Pat Robertson's recent comments about divorcing a spouse with Alzheimer's, several questions have come up.

If there is a divorce and the spouse with Alzheimer's has no assets, does Medicaid pay for it?

If there is a prenuptial agreement that states each partner retains their own assets in a divorce, does the healthy spouse have to pay for the spouse with Alzheimer's?

In general, how does a prenuptial contract affect who pays for the health care of a divorced spouse if they have Alzheimer's or some other continuing health care need?

That is an interesting question, but far beyond my scope of knowledge. I asked a friend, Sonya DuBree, who has practiced family law in Raleigh since 1995, if she would help us out. She provided the following:

North Carolina adopted the Uniform Premarital Agreement Act in 1987 and codified its provisions in Chapter 52B of the North Carolina General Statutes. Chapter 52B governs prenuptial agreements and their enforcement. If there is a divorce where there is a prenuptial agreement that states each partner retains their own assets in a separation or marital dissolution, the supporting spouse may still be required to provide support to a spouse with no assets whose Alzheimer's, or other illness, has caused him or her to be eligible under Medicaid. Section 52B-7(a)(b) of the North Carolina General Statutes provides, among other things, that:

"If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the (prenuptial) agreement, may require the other party to provide support to the extent necessary to avoid that eligibility."

Thus, despite the prenuptial agreement's provisions that each partner retains his or her own assets in a divorce, a court may require the supporting spouse to render support to the spouse with Alzheimer's to avoid that spouse's Medicaid eligibility. In this way the court can override the parties' contractual obligations as a matter of public policy. Our legislators have decided that where a supporting spouse is able to pay for medical expenses, he or she should do so despite contractual agreements otherwise, if the dependent spouse would otherwise be dependent on Medicaid. The support the court could require, however, would only be to the extent necessary to avoid Medicaid eligibility. In other words, the supporting spouse's financial contributions would be capped at the amount the dependent spouse would otherwise be eligible to receive from Medicaid.

Holly Nicholson is a certified financial planner in Raleigh. Reach her at askholly.com or P.O. Box 99466, Raleigh, NC 27624. She cannot answer every question.

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