Baby boomers born between 1946 and 1964 make up a large part of the aging population.  With longer life expectancies, many boomers are working well into their golden years with no plans to retire.  Some may be too optimistic about their future health and prefer not to think about retirement.  The cost of future health care may create a financial burden for many families, especially older couples whose income stream is reduced after retirement.  Many older couples contemplating marriage decide to enter into a premarital agreement.  A premarital agreement allows a couple to predetermine property and financial issues during marriage, upon the death of a spouse or in the event of divorce.  In negotiating the terms of a premarital agreement, couples should consider their potential future health-care expenses, especially nursing home costs, home nursing care, and other expenses not covered by Medicare.

This article discusses laws regarding the obligation of spouses to support each other during an ongoing marriage, the potential for a spouse to become obligated to pay for the other spouse’s health care, to the extent not covered by insurance, and options that older couples and their lawyers and financial advisors can consider regarding future health-care needs when formulating the terms of a premarital agreement.

The Doctrine of Necessaries and Liability to a Third-Party Health-Care Provider

Historically, the husband was obligated to support the wife and could be held liable to a third party, such as a hospital, for services provided to her.  This principle—known as the necessaries doctrine—is now gender neutral in all states that have retained it.  The necessaries doctrine creates a right for a third-party creditor to sue a spouse for debt incurred by the other spouse during the marriage for necessaries.  Many states have specific statutes that define the obligation.  In the Metro area:

District of Columbia.  The necessaries doctrine applies equally to both spouses and to domestic partners. Either spouse or partner may be held liable for a debt incurred by one of them or their dependent child for necessaries.

Maryland.  The Maryland Court of Appeals abolished the necessaries doctrine.

Virginia.  In Virginia, the doctrine applies to both spouses, but only if the parties are living together and are not separated; if they are permanently living separate and apart, neither can be held liable to a third party for the other’s necessaries.

When a couple moves from the Metro area after retirement, to Florida, for example, or if a spouse receives expensive health care in a state other than that of his or her residence, the couple will be confronting the laws of their new state of residence relating to liability for necessaries, or of the state where the health-care provider is located.

The Spousal-Support Obligation during the Marriage

While parties are married to each other, state laws generally require that they support each other.  A spouse can file suit to seek necessary support, often called separate maintenance, and can request a temporary support award to be paid while a divorce suit is pending.  This means that a spouse, or his or her guardian, can file suit to seek support in order to enable him or her to pay health-care expenses.  In the Metro area, parties can waive these rights in an agreement, including in a premarital agreement.  However, in some jurisdictions, parties cannot by agreement waive the right to support that a court could order one spouse to pay the other while parties are still married to each other.

Addressing Health-Care Expenses in a Premarital Agreement

Older couples entering marriage may be looking to preserve their wealth for their own needs in retirement and to provide for their families after their death.  A premarital agreement can be a useful means to achieve these objectives.  The lawyer representing an older person planning to marry with a premarital agreement will need to gather information about his or her financial and personal circumstances, and plans and expectations for dealing with future health-care and long-term care needs. Any provisions of a premarital agreement relating to future health-care expenses must take account of laws that limit parties’ rights to alter their legal obligations while married.  Some possible approaches to addressing health-care expenses include:

• An agreement can define marital and separate debt and can specify whether health-care expenses and nursing home costs incurred by a spouse is marital debt or separate debt.
• The agreement could require that each party pay for his or her own health-related expenses and nursing home costs. Keep in mind that such a provision may not be enforceable against a third-party creditor in the District of Columbia or Virginia under the necessaries doctrine.  Nonetheless, it can offer some protection for the spouse who did not incur these expenses because it may permit him or her to be reimbursed by the spouse who incurred them.  Also, in a suit between the spouses where one seeks temporary support in order to pay health-care expenses, the other spouse can argue that the spouse who has the expenses must spend his or her resources first.
• Some agreements require one party to pay all or most of the parties’ common living expenses and the other party’s personal expenses. The lawyer for the party who is going to assume this responsibility should consider making an exception for nursing home care and in-home nursing care.  The lawyer needs to consider the possibility that both parties will need nursing home care and that a requirement that one spouse bear all of these expenses may be unreasonably burdensome.
• To mitigate future nursing home costs, an agreement can provide that one party, or both parties, will maintain long-term care insurance. A wealthier spouse may consider agreeing to pay the premiums on a long-term care policy for the less wealthy spouse.
• Some employers offer group long-term care insurance. For example, the federal government offers the Federal Long Term Care Insurance Program (FLTCIP) to employees and their spouses. If a spouse is enrolled in the FLTCIP prior to a divorce, he or she may continue the coverage as long as the premiums are timely paid.

Older couples entering marriage, with or without a plan to have a premarital agreement, should discuss with their counsel and their financial advisors the best approach for dealing with future health-care and long-term care needs based on their particular circumstances.