1. What is the elective share?
The purpose of the Pennsylvania elective share rule is to provide a surviving spouse with a reasonable share of a decedent's estate. This is meant to protect the surviving spouse from becoming impoverished by an inadequate inheritance. In Pennsylvania, the surviving spouse is entitled to approximately 1/3 of certain property interests. The surviving spouse may either claim this "elective share" or "waive" it. If it is waived the surviving spouse gets to keep whatever he or she receives as a result of the will and other arrangements made by the decedent.
When one spouse is admitted to a nursing home and may need financial help from Medicaid (Medical Assistance), a couple will often transfer all of the couple's assets to sole ownership of the spouse remaining at home (the “community spouse.”)
If the community spouse is the first to die, assets inherited by the institutionalized spouse will disqualify that spouse for Medical Assistance. In order to preserve the Medical Assistance benefits for the institutionalized spouse, and provide for an inheritance for the couple's children, the community spouse will frequently sign a new will that creates a special needs trust or outright to the children so that they will be protected from nursing home costs.
However, if the institutionalized spouse elects to receive the 1/3rd elective share, that election will take priority over the community spouse's will. The receipt of the elective share will normally make the institutionalized spouse ineligible for Medical Assistance and the elective share inheritance will have to be used to pay for nursing home costs.
In the distant past, the institutionalized spouse could waive his or her elective share, and thereby protect all of the assets from nursing home costs. But the rules have changed.
2. Does the Department of Public Welfare require that the institutionalized spouse claim the elective share?
Yes. The Department of Public Welfare now requires that the institutionalized spouse or his or her authorized representative claim the elective share of a deceased spouse's estate.
3. What if the institutionalized spouse chooses to waive the elective share?
If the nursing home spouse or his or her authorized representative waives the elective share, the Department of Public Welfare will deny Medical Assistance eligibility based on the theory that there was an available asset that could have been collected and thus used to pay for the nursing home resident's care. The waiver of the elective share will be deemed to be a transfer of assets by the institutionalized spouse which will create a period of ineligibility for Medical Assistance.
4. How will the Department of Public Welfare determine the amount of time the institutionalized spouse will be ineligible for Medical Assistance if he or she waives the right to receive the elective share?
The Department of Public Welfare will consider the non-election as a transfer of assets for less than fair consideration and deny benefits for a period of time which is calculated based on the value of the elective share and the average cost of nursing home care.
The Elective share creates a complicated planning issue. But, effective planning by with the help of an elder law attorney who is an expert in Medicaid Planning can reduce the negative impact of the elective share on the continued eligibility of the surviving spouse for Medical Assistance benefits. The best savings can be achieved if the planning was completed while both spouses were alive.
If you are married and your spouse needs nursing home care or long term services and supports at home, you should discuss your situation as soon as possible with an experienced elder law attorney. If you live in Pennsylvania, you can contact one of the offices of Marshall, Parker and Weber. Offices are located in Williamsport, Wilkes-Barre, Scranton, and Jersey Shore (phone 1-800-401-4552). If you reside in another state, you can locate an Elder Law Attorney in your geographic area by visiting the website of the National Elder Law Foundation