Episode 6: The Intersection of Elder Care & Family Law Transcript
Transcript: Shana Siegel, Marisa Hovanec
Shana Siegel: Welcome to Norris McLaughlin’s Aging Answers, a limited podcast series discussing the key topics of elder law planning and long-term care. I’m your host, Shanna Siegel, practice group leader of the Elder Law Group and member at Norris McLaughlin. In this episode, I’m joined by family law attorney, Marissa Hovanec, to talk about the intersection of elder care and family law, and especially divorce for seniors and individuals with disabilities, or when there are children with disabilities. Hi, Marissa. How you doing?
Marisa Hovanec: Hi, I’m good. How are you? Thanks for having me.
Shana Siegel: Oh, absolutely. So, you know, you and I have been talking about this for a while now, but we’ve really been hearing a lot in the media about gray divorce. So can you tell us about what this refers to and a little bit about the phenomena?
Marisa Hovanec: Yeah, so there’s not really any, uh, black and white definition for gray divorce. Generally speaking, it’s referring to divorces of people who are, let’s say, 50 years old and older that are dealing with the issues, not necessarily that a young family would be dealing with, but dealing with a certain, a subset of issues that are unique to their demographic.
Shana Siegel: What are some of the common reasons that you’ve found that more older adults are getting divorced?
Marisa Hovanec: Well, as far as there’s the regular old reasons that you would, that would be applying across all ages. Just people simply falling out of love or having the same issues as regular families. But, uh, also there’s planning reasons, Medicaid qualification reasons. So there are issues that are unique to older individuals that you wouldn’t see in younger families that are financial in nature that are causing the divorce. Maybe not necessarily a loss of love, but a loss of Uh, capacity or ability to care for oneself.
Shana Siegel: I want to get into that in more detail, but first, let’s talk about some of the special issues that emerge in great divorce where it’s kind of a normal divorce, it’s just older people.
Marisa Hovanec: Yeah.
Shana Siegel: How are the, is that still a different animal?
Marisa Hovenac: It’s going to be slightly different, A, because of a lack of certain issues, and B, because of presence of certain issues that are not necessarily present in the younger families. So, as far as the A category of issues that are not as commonly present in the gray divorces, of course there are some exceptions, when there are people who are children later in life. But most of the time in a great divorce, maybe you’re not dealing with custody and parenting time, which otherwise can be a very time-consuming issue in younger family divorces. You may not be dealing with these issues of al sometimes you’re not dealing with alimony, or obviously, if there’s no children, not dealing with child support issues, although if they’re older, maybe they’re in college, you’re dealing with college contribution issues. But if you’re not working, and the parties are retired, sometimes there’s not an alimony claim. There still can be. The alimony statute doesn’t preclude alimony in the event of retirement, but it’s, I would say, less common in the older divorces. As far as the B category of things that are present that may not necessarily be present in the younger divorces, more often we’re dealing with higher net worth. Then a young family, not always, but generally speaking, these people have had a longer time to accumulate wealth. So you might be dealing with more assets or let’s say a business that’s been around for a long time that you’re looking to divide. Also, maybe a greater retirement account balance or a greater number of retirement accounts that can be a little bit cumbersome. And so those things are going to happen a little bit more often in the great divorces.
Shana Siegel: Yeah, absolutely. You mentioned, and I see it in my practice all the time, that the cost of long-term care can be a major factor leading to divorce. And, you know, unfortunately I have to suggest it as a planning option for couples because when we talk about Medicaid planning There are, you know, certain options that are available to individuals up to, you know, maybe a million dollars in net worth. But when you get above that, there’s really much more limited options. And so divorce often ends up being the way that, uh, individuals, couples can save the most in assets. Unfortunately, in New Jersey. Retirement assets aren’t protected from Medicaid, so divorce is one of the most common ways to protect it. So, have you seen this in your practice?
Marisa Hovanec: Yes, I have encountered this in my practice. It doesn’t come around a lot, simply because, and you would know better than I would in this situation, how many regulations exist around this space and the look back period I believe it’s five years, right? So, uh, a lot of times people come to me and that option is simply not going to help them soon enough because of the five year look back. But I have encountered it. And, uh, in one particular case, it, it was necessary because they weren’t millionaires. They had just a little bit left. They were both. Elderly, but the wife had lost capacity. She was living in a long-term care facility. But the thing that made grey divorce or a Medicaid divorce especially applicable there was that they had a long-term care policy, but it only lasted five years, which happened to be the exact amount of time of the look back. So they weren’t going to need to qualify for Medicaid for five years. It was like perfectly made and tailored for a great divorce. And in that case, we were able to get the party’s divorce, put together a settlement agreement that wasn’t unfair, but that transferred most of the remaining assets. to the husband so he could support himself for the rest of his life and not to have to rely on the children because all of the assets were being lost in the Medicaid donut hole. And so everything actually really worked out really well in that situation.
Shana Siegel: So, I don’t know about in the particular case you’re talking about, but very often when we do Medicaid divorces, we don’t do a traditional divorce. We do something called a bed and board divorce. Can you talk a little bit about that and how it’s different?
Marisa Hovanec: Yes, so New Jersey is unique in that we have this It’s like antiquated provision in the law for what’s called a divorce from bed and board, which is not a full final judgment of divorce. Originally created for, I would say, what would probably have started as religious purposes for people whose religions prevented them from being finally divorced.
But who wanted to be, to have a judgment of divorce that simply provided rules for their separation. Because we don’t have legal separation in New Jersey. What it has morphed into overtime as practitioners have discovered the loopholes that exist. Uh, relative to a divorce from bed and board is that a divorce from bed and board can provide a divorce for all purposes except for health insurance. And this doesn’t apply to all health insurance policies, which is what makes it extra complicated, but in most cases, what we’ve found is that the insurance companies have not caught up with the fact that the divorce from bed and board exists and therefore they don’t have language which says that a spouse can no longer be covered upon the entry of a divorce from bed and board. It only says a final judgment of divorce. And so since the divorce from bed and board is not a final judgment, most policies have not gotten wise and not closed that loophole, and therefore people have been able to continue health insurance for one spouse Beyond the entry of the divorce from bed and board, but they can be divorced for all other purpose such purposes such as support Equitable distribution and things like that. So, it actually it ends up working out. Well, the only disadvantage is and this is not as much of a deterrent in great divorce scenarios is that you can’t be remarried when you’re divorced from bed and board because it’s not a final judgment. But it is pretty easy to convert it to a final judgment. You only need the consent of one spouse to do it. And so that’s not even really a big deal to most people. They just say, okay, well, I’ll see. stay divorced from bed and board until I meet that special someone. And then I’ll just get it converted to a final judgment at that time.
Shana Siegel: Yeah. I found that it somehow people feel more comfortable with the idea because it isn’t a final divorce. It’s more along the lines of a separation. But I did have a case recently where the couple was a little bit younger, and they still had health insurance other than Medicare and so one of the parties was working so it worked out really great that the health insurance wasn’t going to be terminated so.
Marisa Hovanec: And then in your cases that you’re talking about with the Medicaid divorce If they aren’t necessarily getting divorced out of lack of love, that might help them feel a little bit more comfortable about it because they’re not fully being divorced. So in their minds, maybe they still are partially married.
Shana Siegel: Yeah, yeah. Most older adults considering divorce They have no cognitive impairment. They’re just like any other party getting divorced. But sometimes, particularly in the, you know, when you’re dealing in a Medicaid situation, but I would imagine in others as well, you might have a party with cognitive impairment. Uh, that makes this a lot more complicated. Can you talk about some of the protections that are in the law and how you deal with a situation where one party is cognitively impaired?
Marisa Hovanec: Yes. So, there will be two distinctions. First that are important to make so you can have a case with a person who’s cognitively impaired who has executed a power of attorney prior to the divorce. In which case, the power of attorney is allowed to act on behalf of the incapacitated, and in my experience, even sign the marital settlement agreement on their behalf. But then you have this other category of cases where there is no power of attorney that’s been executed already, in which case you’re going to need to ask the court to appoint what’s called a guardian ad litem to act on their behalf. And in the past, in divorces, that was a pretty easy thing. You just asked the judge to do it and they would do it. Or you could even have, well, it’s difficult to agree with someone who has no capacity, but really you just needed one party to show good cause to the judge and they would do it. The law has since changed by a case that came down from the Supreme Court a few years ago to provide that the judge in a case where they’re being asked to appoint a guardian ad litem even in a divorce case, must make the same findings regarding incapacity that they would be required to make in a normal guardianship case before appointing the guardian ad litem. So that can get a little bit difficult. And so to be clear, what a guardian ad litem’s role then would be once appointed is that they would essentially be able to step in the shoes of the incapacitated party and they would be making determinations and decisions from a fiduciary role standpoint on behalf of the incapacitated essentially settling the divorce or going to trial over it, which I think would be pretty difficult most of the time they’re going to want to settle. But yeah, they’re essentially going to become the decision-makers on behalf of the incapacitated.
Shana Siegel: Well, it sounds like that would certainly be a situation where an elder law attorney might be getting involved in a case like that.
Marisa Hovanec: Yeah.
Shana Siegel: So, when else in a great divorce might you work with an elder law attorney or refer your clients to kind of work with an attorney? Alongside the divorce.
Marisa Hovanec: Yeah. Well, as you said, in those cases where I identify, where I identify that either my client or the other party could be incapacitated, we’re going to probably need to involve an elder law attorney to help with that guardianship process. And in addition, whenever we encounter this type of Medicaid divorce scenario. 100 times out of 100 times, I’m going to want to consult with or involve an elder law attorney because of these ever-changing Medicaid and Social Security regulations. It is so easy to write an agreement that could be scrutinized by the government later on and potentially disqualify someone for benefits that they would’ve otherwise qualified for had we included an elder law attorney who knew what they were doing and looking out for when writing the agreement. So in that case, I’m always going to either recommend that my client allow me to consult with an elder law attorney and potentially bring them in as an expert, or that they consult with one for themselves and retain that person to assist alongside me in not only reviewing the agreement, but preparing what other type, whatever other types of estate documents might become necessary along the way.
Shana Siegel: Right. So, I was involved in a case where the couple intended to continue living together. And so one of the things that, you know, we had to do, which the family law attorney didn’t even, you know, think about because it’s not something you normally do in a divorce situation was cohabitation agreement and a contribution, like a, basically a rental agreement because the house was going to be owned by one person now and the other person was still going to be living there, but how they were going to, you know, um, pay in contributions. So yeah, so it can, you know, a lot of things that don’t, you don’t see normally. Normally, people aren’t staying living together when they’re divorced, so, you know, a lot of details there.
Marisa Hovanec: Yeah, that’s definitely something I would be calling you about.
Shana Siegel: So sometimes when clients are going through divorces, this is, you know, whether it’s a senior or not, uh, they call me and they ask about changing their estate plan. But I know that that’s kind of a no-no to do like in the middle or right before you get divorced. So, I wanted, was interested in how you advise.
Marisa Hovanec: In that case, as far as I’m aware, there is no regulation or statute or law or court rule that says you can’t change your will at any time in the divorce process. And so, a lot of times, recently I represented an elderly gentleman who had a lot of money. There was a prenup. So, it’s already said that the wife didn’t, wasn’t entitled to that money. But, because he was elderly and we didn’t know how long the divorce process was going to last, I did recommend that he change his will very early on in the process. Just in case he were to pass away during the process. But, there are rules and regulations which prevent parties from changing their insurances. Once a complaint for divorce is filed. And in fact, at the beginning of a divorce, you have to certify that you’ve made no changes within 90 days of filing the complaint for divorce, too. And so, while generally speaking, in some cases, I will recommend, or at least not stop a client from changing their will and power of attorney once the case starts, I have to tell them that you can’t change the beneficiaries on your life insurance, you can’t change the beneficiaries, you can’t remove any party from your health insurance, even car insurance. And so that is important because if they do that, they can get in trouble with the family court. But from the Will’s perspective, it’s not really probably morally a good idea to make changes except in certain circumstances. But as far as I’m aware, there’s no rule preventing it or prohibiting it.
Shana Siegel: But I think the rule that you mentioned would also apply to maybe like moving assets or putting assets into trust, things like that.
Marisa Hovanec: Absolutely.
Shana Siegel: So that would all be problematic.
Marisa Hovanec: Starting a trust, which precluded a spouse, your spouse from receiving what they were otherwise entitled to under the law. Of course, you’re aware of, probably better than I am, of like the elective share statute and everything, which says that if one party dies and doesn’t leave a sufficient amount to their spouse, then the law can step in and reallocate those assets. It, things get very complicated if someone dies during a divorce and that could be a whole other podcast on, in and of itself. So yeah, it’s not my favorite thing to do to have people start changing their estate plans before we’ve reached a settlement agreement.
Shana Siegel: Yeah. I think that dying in the middle. That’s. That’s been subject to, I think there’s some legislation out there.
Marisa Hovanec: Yeah, there’s pending legislation to try and close that black hole, we call it, that exists when that happens.
Shana Siegel: Alright, so maybe we’ll have you back and talk about that, but right now I want to turn to disability issues, because a lot of times that emerges in divorce, either if you have one of the parties who has a disability, or very often when you have clients who have children with disabilities, and you know, those issues don’t go away as you’re talking about older adults, because very often then the children. You know, continue to rely on their parents. So what is your experience been with this in your practice?
Marisa Hovanec: So, with respect to parties who have disabilities, that can be difficult, especially depending on when the disability arose. I mean, less often we’re talking about people with developmental disabilities because infrequently, they’re getting married and then divorced. But, with respect to disabilities that arose during the marriage, if they’re a younger couple, it could be giving rise to a long-term alimony obligation. Of course, we have an alimony statute, which gives us twelve factors that we have to consider when we’re determining alimony. And one of them, of course, is the ability of the parties to earn, and so if one’s spouse is, has become disabled, that could potentially be a reason not only to award alimony, but to award alimony for a longer period of time than the statute might otherwise allow. So, just generally speaking, in New Jersey, when you have a marriage of shorter than 20 years, The alimony is not supposed to last longer than the duration of the marriage, and very even, rarely even approaches the entire length of the marriage. But when you have someone who has a lifelong disability that arises during the marriage, that could qualify as an exception to that 20-year max. And so that could put a case that would have otherwise been a limited duration alimony case into the indefinite, or what we call an unlimited duration alimony type of situation. The children with disabilities arises much more frequently than the other case that I described. Actually, in almost every case these days, you’re dealing with at least one child who has maybe not a developmental disability or a lifelong disability, but very often, the types of disabilities that might delay their reaching adulthood and, and moving beyond the sphere of influence of their parents. And so, that is going to give rise to questions about, I mean, obviously, custody and parenting time, because depending on the needs of the child, that could affect who is best able to care for the child. But also, more often, child support. And so, it can affect both the amount of child support, depending on. A, whether the child has extreme financial needs that stem from their disability, maybe they need very specific medical care or tutoring or treatments that are not covered by insurance, that can certainly cause the child support to be higher. Alternatively, they might receive significant government subsidies. And that could cause the child support to go lower because means-tested benefits that the child receives would reduce an other in normal cases of child support that’s calculated pursuant to our New Jersey child support guidelines. Means tested. Support received from the government on behalf of the child can reduce the amount of child support that they’re entitled to and then most often, this type of disability is going to extend the length of the child support. And so, in New Jersey, we have what’s called Emancipation and that would occur well, there’s legal emancipation, like a child reaching the age of 18 and becoming entitled to make decisions on their own behalf, but then we also have child support emancipation. And that doesn’t necessarily happen at 18. Even for a healthy child that could be extended potentially to age 23 or beyond if they continue to be enrolled in school on a full time basis, such as college, but in the case of a child with a disability that could go even past the child’s 23rd birthday. It’s just that it’s going to take a little bit of extra effort on behalf of the parents in order to allow that to occur because otherwise, as far as the state’s concerned, unless they know that your child over 23 has a disability, they’re going to automatically terminate the child support at 23. So, it’s going to take some extra steps, which that could be its own podcast on its own. Or if you would like me to go into some of those extra steps, I’d be happy to as well.
Shana Siegel: Yeah, so I do want to talk about the process because I know that that changed about five years ago and I know I had a lot of clients coming to me at that time as you know, I’m sure you did with real confusion about that and what the process was and you know, I know it’s a it’s a two-step, right? So, at, at like, it’s 19, right, is the first thing and, and you have to ask for it to be extended. But then at age 23, then it kind of shifts out of the child support enforcement arena. So, can you talk a little bit about those steps and, you know, how it works?
Marisa Hovanec: Absolutely. So, in New Jersey, we have what’s called the New Jersey Family Support Payment Center. And sometimes we call it probation for short. So that’s what I’m going to refer to it as. Every parent who receives child support has the automatic right to receive that support through probation. And more typically that’s coming through an income withholding on the supporting spouse. And probation is very useful because they not only can do an income withholding, but they can take all kinds of other automatic enforcement measures. So, most people are going to elect to have their child support collected through probation. The downside is that the law changed recently, like within the last five years, to say that because probation was kind of getting overwhelmed with the number of cases it was managing, they decided that once a child turns 19, unless, the parent, the custodial parent can prove that the child continues to be enrolled in school on a full-time basis. We’re going to cut them off. We don’t care what the situation is. We don’t care if there’s a court order saying the child is emancipated or not. We’re just going to stop being responsible for managing the payment of child support at age 19 unless that can be proven that the child remains in school full time. So, when a child is reaching the age of 19, probation sends the parent receiving support a letter saying, Hey, your kid’s about to reach age 19, unless you can send us proof of enrollment in school with it by a certain date, we’re going to stop collecting child support on the child’s behalf. It’s pretty easy to meet that burden. Most parents can do that without consulting me or, or you. They can send in the syllabus or whatever probation is requiring these days to prove. full-time enrollment. When the child reaches 23 though, the law says that probation is done. They’re done. Even if the child remains a full-time student, there is very black-and-white legislation saying that probation’s job is finished. So, at that time, it doesn’t matter if the child is in school full time or not, they’re gonna send another letter to the custodial parent and say, hey, your child’s turning 23 on, you know, whatever date, January 1st, 2024, and child support is going to no longer be collected through probation at that time. In most cases, by age 23, either the child is done with school, or they’ve already been emancipated before that, in which case it doesn’t apply. Or, they’re about to graduate and the parents are like, it’s not worth it, me hiring an attorney for a few more months of child support, and they just called it a day. But when you have a child, such as I encountered recently, who, uh, let’s say in the case of that recent case had Down syndrome, and was never going to emancipate, was never going to be able to move beyond the sphere of influence of the custodial parent, He was going to live with that parent forever. He was even done with high school by that point because he was over age 21. And, uh, he was in a day program, but he had absolutely no way of supporting himself, other than the social security benefits that he was receiving by that time. So, my client and I had to make a special application to the court to say, especially because my client had no relationship with the father. So, you can always continue to have support paid directly, without probation, and in the cases of parents who remain involved, that’s easy. It just requires a little agreement. But in this case, they had no contact. She was not going to collect one more dime unless the income withholding continued, so we had to make this special motion to the family court to say, hey, can you find an exceptional circumstance exists here, which requires that probation continue to collect child support on behalf of this child indefinitely. And it took some effort because a lot of these judges don’t even know that that exception exists. They think, they read the statute, and they say, this is black and white, the child’s over 23, you’re out of luck. But that’s not exactly what the statute says. It does allow in exceptional circumstances for that collection to continue. So, we had to write a letter brief. We had to submit it to the court. We had to educate the judge a little bit. And once he was educated, he did the right thing and he extended the child support indefinitely. So now the burden is going to shift back to the dad. If he ever feels Somehow, that this child with Down syndrome is now self-sufficient, and perhaps if he moves into a group home and is no longer relying on the mom, then the burden is going to shift to the dad now to apply to the court to say that child support can be terminated.
Shana Siegel: Got it. Well, that’s really interesting. So, you mentioned public benefits, and I know, and means-tested benefits, and I know that means-tested benefits and child support are very, uh, complicated. Over 18, if someone’s getting child support, then that’s considered income to them. That can actually kick them off of public benefits. So, we typically work with the family law attorney to have that child support be directed by the court into a special needs trust. Sometimes families decide that that doesn’t make sense and they find other, you know, ways to achieve the goals of child support. So, can you talk about if you had experience working with, you know, attorneys such as myself on those issues and some of the other issues that come up and may have to be incorporated into the settlement agreement issues like, you know, who’s going to serve as guardian? Is a guardianship action going to be brought? That’s going to happen with health insurance. Is all of those kind of issues.
Marisa Hovanec: Absolutely. Yeah, from the child support perspective, we have to get creative because of what you said. In a lot of cases, when the child is turning 18 or 21, depending on the circumstances, maybe they’re applying for social security benefits and the parents are finding out that, oh, my child support that I receive for this child is going to count as income against the child for purposes of disqualifying them from either Social Security or Medicaid or both. And in order to maximize those benefits, a lot of times the parents who in divorce, I don’t get a lot of people who are generally willing to cooperate, but a lot of times in that situation, the parents are willing to cooperate to come up with creative language that will allow support in some fashion to continue without disqualifying the child for benefits. And so one example that recently came up and, and my hot tip, I would say for these types of situations is when you have more than one child, one thing that you can do, and what I did in this recent case is the child who was looking to receive means-tested benefits because he had a disability was the oldest child. There were still, still two children under him. who were entitled to continue child support. So what we did in that case was the parents agreed that, okay, I’m going to continue, this is, I’m dad right now, I’m going to continue paying the same amount of child support that I’ve always paid, but we’re going to enter into a consent order, which is a, just a court order entered by consent, which says that this child support amount is now only attributable to the two younger children, and the older child is no longer, is emancipated, even though he’s not technically able to care for himself, we were able to get the court to put in an order that the child support is not for that child but was going to continue in the same amount so in that case the mom was able to continue to receive child support in the same amount and therefore the child would receive an indirect benefit by virtue of the mom having enough money to support the family in the same way she always did but he was not disqualified from receiving social security benefits because from the court’s perspective There’s no child support that is for that child.
Shana Siegel: Yeah.
Marisa Hovanec: So, that’s one way that I’ll often look to it. Of course, if there were no other children, I would be calling you to say, Hey, can you help me direct this client with respect to either setting up a first-party special needs trust to receive these benefits or potentially discussing the pros and cons of a using enable account for some purpose in that regard, which is really interesting to me and I’m constantly trying to figure out, okay, where What are the rules and regulations on ABLE accounts as it relates to child support and qualifying or disqualifying, because frankly, it’s, I don’t, can’t find anybody who’s entirely 100 percent clear. But we as family law practitioners are constantly listening to podcasts like this to try to determine how can we get around that because it really isn’t fair. to the family that such a small amount, like in that case, let’s say it’s 300 a week in child support for three kids. How can you take that away just to qualify for Social Security? You’re not, you’re, you’re not going to enhance the child’s life that way.
Shana Siegel: Yeah. Yeah. Sounds like a lot of opportunities for family lawyers and elder law attorneys or special needs attorneys to work together for the benefit of their clients.
Marisa Hovanec: Yes.
Shana Siegel: You know. Our areas are so intertwined, so there’s really so many places where, you know, we could really do that together.
Marisa Hovanec: And the guardianship, just to finish answering your question, you asked about people providing in agreements for guardianship and things like that. I always try to get ahead of that as well. If we have a child with a developmental disability and the parties are getting divorced, the child isn’t yet 18 but is eventually going to be there, if I can I’ll try to get into the agreement some type of [00:31:00] resolution about who is going to be the child’s guardian in the future, who’s going to apply, who’s going to be responsible for the costs of applying. Sometimes you can’t get there. Because when you get to the finish line in divorce, sometimes you have to make choices about, okay, I don’t need to agree to this we can kick that can down the road later in order to expedite resolution. But when parties truly are working together on the ben for the benefit of the child It’s beautiful and we can put things like that into the agreement and I often will and sometimes I’ll even name who the parties are Going to agree to go to and retain for purposes of the guardianship application.
Shana Siegel: Sounds great.
Marisa Hovanec: Yeah.
Shana Siegel: Marisa, you’ve given us a lot to think about we really appreciate it. So, thank you for being here today.
Marisa Hovanec: Thank you so much.
Shana Siegel: Giving us some education This has been Norris McLaughlin’s Aging Answers limited podcast series discussing the key topics revolving around elder law planning and long-term care. I want to thank my guest Marissa Hovanec and you, the listener, for being a part of this conversation. Be sure to tune in next time for a brand-new episode. If you’d like to learn more about our work, please email me at aginganswers@norris-law.com