A big part of elder law is helping clients get eligible for Medicaid since that government program has strict rules about an applicant’s assets, income, and prior transfers. There are a variety of legal strategies to employ to meet the eligibility rules and obtain long-term care benefits. However, is submitting a seemingly one-sided consent judgment a viable strategy? Can the judge reject the consent judgment because Medicaid qualification might be a motivating factor for the parties? This issue was recently litigated in Michigan.
Caroline and James were married; James lived in a nursing home. Caroline filed a proposed consent judgment in court, stating that the marriage could not be preserved and requested that all of James’ pensions would be transferred to herself. James’ response admitted all of Caroline’s allegations.
A referee in the case recommended that the case should be dismissed, claiming that the division of assets was not fair to James. Further, the referee stated that the only reason the pair were filing the document was so that James could qualify for Medicaid benefits. The trial court agreed, ruling that the terms of the proposed consent judgment were not in James’ best interests. Caroline appealed the court’s dismissal and we now have an unpublished appeals ruling out of Michigan.
The appeals court looked to the pertinent statute, MCL 552.7(4), which states:
“(4) If evidence is presented in open court that there has been a breakdown in the marriage relationship to the extent that the objects of matrimony have been destroyed and there remains no reasonable likelihood that the marriage can be preserved, the court shall enter:
(a) A judgment of separate maintenance if a counterclaim for divorce has not been filed.
(b) A judgment dissolving the bonds of matrimony if a counterclaim for divorce has been filed.”
The Court stated that Caroline had testified that she didn’t want to live in the nursing home with James and the marriage could not be preserved. Statutorily, this was all that was needed to warrant a consent judgment. The court also looked at pertinent case law that stated a consent judgment is a contract that should be honored unless there is “fraud, mistake, illegality, or unconscionability.” The trial court did not find that any of these things were present. Accordingly, the consent judgment should be honored.
Elder law attorneys help people plan for the remainder of their lifetime and find the best legal strategies to ensure clients leave a valued legacy for their loved ones. Watch this video and learn how using certain tools can result in optimal planning for your clients during their lifetime.