Should Grandma divorce Grandpa?

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. "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.

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Updated May 27, 2009

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