Divorce dying spouse to avoid medical bills?

[justsomeguy]

You all are certainly welcome to carry on your debate (some of you can sure get nasty on here by the way).

But in my case, something I neglected to think about is my life insurance policy.

I'm assuming the hospital would have first claim to it anyway even in the case of a divorce even if the sole benefactor was my ex, or our child.

Probably a mute point for me, I'm guessing if we stayed married she would just get what's left of the policy after the bills are paid. if anything is left.

 

[ecmst12]

You would be completely wrong about life insurance, it is NOT considered part of an estate, it is paid directly to the beneficiary and can't be claimed by creditors of the deceased. And you already said it's not YOU that's involved. The INVOLVED COUPLE needs to see an estate planner for help.

 

[cbg]

There is no way in holy heck that a life insurance policy will be paid out to anyone other than the named beneficiary. That doesn't mean that your wife could not be expected to use the proceeds to pay the bills, but the policy will not be paid out to the hospital.

 

[Bali Hai]

There is no way in holy heck that a life insurance policy will be paid out to anyone other than the named beneficiary. That doesn't mean that your wife could not be expected to use the proceeds to pay the bills, but the policy will not be paid out to the hospital.

Could the family dog be named beneficiary? Remember Leonna Helmsley?

The dog could then tell Eddie Murphy what should be done with the proceeds.

 

[Ohiogal]

Correct, and it also addresses a case that has not even been heard yet by any court, let alone gone to the higher courts. (Walter Forbes) I read through a bunch of articles on the subject and Misto is clearly wrong. In his defense, what he is seeing is a lot of opinion on the fact that it SHOULD be illegal to divorce for financial reasons (which is not my opinion) but he is not picking up on the fact that the actual law does not coincide with that opinion.

Incompatibility is actually a NO FAULT ground. Also, ALL divorces have grounds. Some are just considered no-fault! And in some states it is illegal to divorce for financial reasons depending -- Ohio has started going after those who divorce to get medicaid. Why? Because it is fraudulent.

 

[Ohiogal]

Hmm...that addresses a divorce granted with grounds. Many states now have no fault divorce.

No fault is still GROUNDS. Incompatibility is a no fault ground for divorce. All DIVORCES have some LEGAL GROUND upon which they rest. So what is your point?

 

[Ohiogal]

I am copying the actual information directly here, so that there can be no confusion.



You will note that in this case the husband received virtually all of the marital property. My initial post on this subject emphasized equitable distribution of marital property.

Hence my post on the subject. IT COULD be fraudulent. This OP has not given NEARLY enough information regarding the divorce.

You will also note that this was a "grounds" divorce it was not a no-fault divorce.

Now you are just being STUPID. All divorce must have GROUNDS. Incompatibility is NO FAULT -- and GROUNDS for divorce. So quit showing your moronic side. ALL DIVORCES are granted based upon the grounds shown -- some are no fault while others are fault. Incompatibility is seen as NO FAULT. As is separation for more than a year in many states. You have no clue.

As the author noted, there is no other case law available on the subject...or at least there wasn't when the article was written back in 2006.

And now it is 2011. Have anything to back you up?

Since then, there is new case law, federal case law, that says differently. (the Continental Airlines case)

Continental Airlines got a divorce? Really? They were charged with a crime for fraud in their divorce?

You cannot take a 2006 case, from one single state, where the property settlement agreement was blatantly one-sided, and use that as an indication that it is illegal in all states to divorce for financial reasons...PARTICULARLY when there is a later federal case, that says differently. The federal case that says differently is even very specific that its not even permitted to investigate the reasons for a divorce.

That is a CIVIL case brought by a corporation. NOT a criminal case. Good try. But wrong.

 

[mistoffolees]

I totally agree with you Ldij! Your advice is spot on! In this situation, the spouse is divorcing the terminally ill person because of the threat of losing assets due to the medical care of the dying spouse. 'I don't want to give up anymore assets so I'm divorcing you.' Perfectly honest and perfectly legal. After the divorce is final, future medical bills incurred by the dying former spouse would only be his obligation.

Aside from the fact that there is at least one case that disagrees with you and Ldij.

Now, I agree that it's not likely to be prosecuted, but if the couple is really staying together and getting a paper divorce solely to hide assets, it may not be legal - and certainly constitutes an intent to defraud the taxpayers.

 

[Ohiogal]

Correct, and it also addresses a case that has not even been heard yet by any court, let alone gone to the higher courts. (Walter Forbes) I read through a bunch of articles on the subject and Misto is clearly wrong. In his defense, what he is seeing is a lot of opinion on the fact that it SHOULD be illegal to divorce for financial reasons (which is not my opinion) but he is not picking up on the fact that the actual law does not coincide with that opinion.

Actually YOU are wrong. Why? Because you don't understand that every single divorce ever granted has grounds as to why it should be granted. So to say that a divorce does not have grounds (which is what you are saying) reveals your stupidity. Nice try. But wrong. And revealing of your ignorance on more than one level.

 

[Ohiogal]

It is very possible that a person may want a divorce from a terminally ill spouse.

For sexual reasons. Abandonment...

Harsh, but real.

And not fraud.

True but depending on how they protect assets IT CAN CONSTITUTE fraud and CAN open up criminal and civil liability.

 

[Ohiogal]

You all are certainly welcome to carry on your debate (some of you can sure get nasty on here by the way).

But in my case, something I neglected to think about is my life insurance policy.

I'm assuming the hospital would have first claim to it anyway even in the case of a divorce even if the sole benefactor was my ex, or our child.

Probably a mute point for me, I'm guessing if we stayed married she would just get what's left of the policy after the bills are paid. if anything is left.

Insurance policies and items with a beneficiary pass OUTSIDE of the estate. Therefore, the hospital would have NO CLAIM to it. And the word is "moot". And how do you know you are DYING SOON? Heck, I am dying. Have been since the day I was born. It is very possible you will live another 20, 30, 40 years. Unless you are giving up. But that is a choice.

 

[tuffbrk]

No fault is still GROUNDS. Incompatibility is a no fault ground for divorce. All DIVORCES have some LEGAL GROUND upon which they rest. So what is your point?

Of course you are correct. I understood that what was proven to be fraudulent was that the couple remained compatible while having claimed incompatibility in their divorce. My point was that the grounds chosen were disproven. Had a no fault option other than incompatibility been chosen, perhaps the outcome would have been different? As a married couple, they couldn't reconcile their differences but remain best friends as a divorced couple?

 

[commentator]

Yes, you could try to get a divorce for this reason. I have seen couples who had to divorce so one party could get auto insurance. But as someone who has had a diagnosis like this, I am curious as to why the OP is so sure they are going to incur these absolutely insurmountable medical bills? I understand that you'd like to leave your spouse in good financial shape, if and when you pass on, but what if the treatment works and you outlive your spouse?

What is your prognosis? Have you no health insurance now? If so, is the party being divorced who carries the coverage going to take the other person off their insurance? Is he/she on Medicare? Medicaid already? If so, divorcing now won't help one iota.

You seem to have a very poor understanding of the way medical bills are typically paid. They aren't standing around waiting for a pay off so that they can take all and give the beneficiary of the life insurances the remainder.

There seems to be no clear cut way to twist this around and make it appear that this couple would be divorcing for any other reason other than financial. So why, pros and cons, can you possibly decide this would be a good idea?
How would your family feel about this? They'd have to know it was done with the intention of being dishonest big time.

If you have no moral compunctions about cheating your medical providers and not paying your legitimate bills for costly care which you haven't incurred yet, if you're so positive you'll run up these big hospital bills, why not just go on and commit suicide now before incurring them so as not to leave your spouse with a lot of debt? You could refuse all treatment and not incur any debt.

 

[mistoffolees]

True but depending on how they protect assets IT CAN CONSTITUTE fraud and CAN open up criminal and civil liability.

Which is why people should do their financial planning long before they face that kind of problem. For example, all of my assets are owned by a trust so that my daughter will get my things regardless of what else might be going on with my estate.

 

[justsomeguy]

You would be completely wrong about life insurance, it is NOT considered part of an estate, it is paid directly to the beneficiary and can't be claimed by creditors of the deceased. And you already said it's not YOU that's involved. The INVOLVED COUPLE needs to see an estate planner for help.

That's actually really helpful information thank you.