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Why some couples faced with long-term disability choose divorce

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We've talked about the importance of having long-term care insurance to help cover nursing home care and other assisted living expenses if a person becomes too ill or disabled to care for themselves. The critical importance of this coverage in protecting older people from potential financial ruin is obvious in an example provided by a certified financial planner. Sadly, this example is not an anomaly.

She tells the story of a 72-year-old couple who have been married (both for the second time) for over a decade. The wife was diagnosed with Alzheimer's disease several years ago, and the couple is paying over $3,000 on a monthly basis for personal caregivers.

The caregiver costs used up the wife's assets and were depleting the husband's savings. Since the wife would soon be moved to a nursing home, their risk of losing their remaining assets was growing -- assets the husband might need if he became ill or disabled in the coming years.

Sadly, in consultation with attorneys, the CFP determined that the best way for the couple to protect the couple's remaining assets was to divorce -- at least on paper. In fact, this is one reason the divorce rate among older couples is increasing.

Many people assume they don't need long-term care insurance because Medicare and Medicaid will be there to cover them. However, there's a limit to how much these programs cover. Medicare covers only 100 days of nursing or long-term care. After that, you need to pay for this care "out of pocket" until nearly everything you have is gone. Only then will Medicaid cover your care.

The problem for married couples is that nearly all of their combined assets must be depleted before Medicaid steps in. That's why sometimes divorce is the only way to protect at least one spouse's assets. It doesn't prevent a spouse from continuing to be a caretaker, but the emotional price that comes from taking this step can be high. The CFP recommends long-term care insurance to help prevent couples from getting into such a dire situation.

The cost of medical and assisted living care is rising at a time when our population is aging. That's why it's essential to ensure that you begin to plan sooner rather than later for how you and your spouse will pay for long-term care if one or both of you needs it.

Source: Forbes, "Divorce Due To Medical Bills? Sometimes It Makes Sense" Eve Kaplan, CFP Practitioner, Aug. 21, 2014

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