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Medicaid Divorce: An Overview

By Michael L. Olver and Christopher C. Lee
November 29, 2010

Before Medicaid rules changed in 1987, divorce had been used as a planning tool to allow one spouse to qualify for Medicaid assistance and to avoid impoverishing the well spouse. Since recent changes to Medicaid rules in May 2006, the “Medicaid divorce has been resurrected as a planning tool.

The term “Medicaid divorce” may be familiar to some, but unheard-of to others. This article does not attempt to provide a guide as to how a Medicaid divorce should be handled. State law varies greatly in each state's treatment of Medicaid divorces. State law also varies with regard to its handling of Medicaid assistance. A Medicaid divorce should only be handled by those familiar with the applicable state and federal laws.

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