The population of divorced people over 65 has exploded in the past 15 years, and elder-law attorneys suspect money is at least partly to blame.

The idea that money might be a factor in divorce isn’t news. But instead of fighting over their money, these attorneys say, older people who divorce might be trying to preserve it.

Christine Crawford of Aurora, Ohio, started divorce proceedings after her husband’s care for dementia consumed more than $100,000 of their savings.

Crawford said she didn’t want to divorce her husband, with whom she’d raised three children, but it was the only way to preserve what was left of their life savings.

"All along I kept saying, ‘Absolutely not. I won’t do that,’ " said Crawford, whose husband died before the divorce was final. "I was so proud of the fact we’d been married for 42 years."

Trapped by aid-program rules

To understand why Crawford faced such a wrenching decision, you need to understand some background:

  • Medicare, the government insurance program for people 65 and over, doesn’t cover long nursing-home stays.
  • But Medicaid, the federal health program for the poor that does cover such care, generally requires people to exhaust their financial resources before they can qualify for help.

When one spouse gets sick, many married couples face the uncomfortable prospect of having to "spend down" most of their assets to qualify for Medicaid, leaving little for the healthy spouse to live on.

If the spouses divorce, however, the healthy spouse may be able to preserve more of the couple’s assets.

Percentage of people who listed their marital status as divorced
Year All adults 65 and over

1990

9.0%

5.0%

1995

9.1%

5.7%

2000

9.3%

6.7%

2005

9.7%

7.9%

Source: U.S. Census Bureau

Elder-law attorneys suspect that’s among the reasons the proportion of people over 65 who list their marital status as "divorced" has risen nearly 60% since 1990, compared with an 8% rise in the proportion of divorced adults overall.

The attorneys fear the trend may accelerate in coming years, at least in some states, because of recent changes in Medicaid laws that make it tougher to qualify. I outlined some of those changes in "Feds target Grandma’s Medicaid."

Other causes of divorces

There are doubtless other contributing factors to the rise in the number of divorced folks over 65:

  • Some of the increase could simply be fallout from the overall rise in divorces. The older a woman is when her marriage dissolves, the less likely she is to remarry. By age 65, women outnumber men, and the disproportion rises as we age.
  • Other financial factors can also discourage remarriage. A divorced person who receives Social Security benefits based on an ex’s work record could lose those benefits if he or she remarries. Affluent older people may be disinclined to marry if they’re concerned about entangling their finances with another person’s, or about the extra estate planning that would be necessary to ensure that their kids, rather than their potential new spouse or the spouse’s kids, get any future inheritances.

But many people, especially women, emerge from busy child-rearing years with time to re-evaluate their lives and their partners, said Barbara Waxman, an executive and life coach with San Francisco’s Odyssey Group who has a master’s degree in gerontology.

"Women want relationships that work," said Waxman, a contributing editor to the book "How to Love Your Retirement." "They see they’ve got another 20 years of life and good health, and (divorce) is a choice more and more are willing to make."

Still, the idea that a federal program would encourage divorce, however indirectly, doesn’t sit well with many.

Crawford’s attorney, elder-law expert William Browning, believes the divorce rate would be even higher except that many people refuse to consider legally terminating long-term marriages.

"I’d say two-thirds of the people say no," Browning said, after being told that divorce may be their only option to preserve their assets.

Underestimating the cost of care

That was Christina Crawford’s response for months after Browning suggested it.

Her husband’s dementia developed after open heart surgery in 2000, when he was 59. She cared for him at home for several years, eventually hiring home health workers to help. Her grown daughter moved back home to pitch in. Eventually Crawford’s husband was moved to a nursing home.

Before the illness, the couple had discussed getting long-term-care insurance, but Crawford said her husband didn’t think it was necessary.

"He said ‘Chris, we don’t need it,’ " said Crawford, 64. "We can pay for it."

Neither spouse realized how quickly long-term-care costs can mount, Crawford said. She was faced with losing much of the buyout package her husband had received when he took early retirement after a long career as a manager at Xerox. If he eventually qualified for Medicaid, Crawford said, a lien could have been placed on their home to repay the cost.

The stress of working full time, visiting her husband daily in the nursing home and struggling with what to do about their finances sent Crawford’s blood pressure soaring. She finally consented to filing the divorce paperwork.

"I knew my husband well enough that if it was a matter of losing everything he worked so hard for, he would have told me, ‘It’s crazy. Just do it,’ " Crawford said. "It wouldn’t have changed my feelings for him or my actions toward him. I would still be there for him."

Crawford’s husband died after she filed for divorce but before the paperwork was complete. As a widow, she is able to retain the assets she might have lost had he lived.

Only real option: Plan ahead

Crawford hopes her story might help other couples to better prepare themselves for the costs and decisions involved in long-term care. I’ll second the motion.

I’ve said before that I don’t think much of affluent or even middle-class people artificially impoverishing themselves to qualify for a federal insurance program that was designed for the truly poor, especially if the aim is to preserve an inheritance for adult children.

But I also don’t much like the idea of people winding up broke in their old age because of a spouse’s nursing-home care.

As individuals, we need to do everything we possibly can to plan for illness and aging. As a society, we need to figure out better options than divorce to keep seniors out of poverty.

For the time being, though, we’re stuck with what we’ve got. If you or someone you love may face the Medicaid divorce dilemma, consider the following:

  • Talk about it. If you’re married, discuss with your partner how you’ll pay for long-term care. Home care and nursing homes can run $50,000 to $150,000 a year. Where would the money come from? How do you feel about using government assistance to pay for it?
  • Evaluate long-term-care insurance. This coverage pays for nursing-home and (often) in-home care and can help you preserve your assets. But you need to purchase it before one of you becomes ill, and the older you are when you buy it, the more it costs. AARP has more information on how to evaluate coverage and costs.
  • Consult an elder-law attorney about your options. If it’s too late for long-term-care insurance or you can’t afford it, you should know about your alternatives, whether or not you decide divorce is among them.
  • If you do divorce, do it right. This is not a do-it-yourself project, Browning said, particularly if you want to keep Medicaid from going after your assets after an ill spouse dies. Both partners need to be represented by attorneys, and a court-appointed guardian may be needed for a spouse who’s incapacitated.

SOURCE: Liz Pulliam at MSN Money and Diana Skaggs at Divorce Law Journal