Adult Adoption for Spouses with Alzheimer’s

A man called in to TV Evangelist Pat Robertson’s broadcast last week seeking advice on a man who became romantically involved with another woman after his wife was diagnosed with Alzheimer’s. Surprisingly, Robertson said that divorcing the wife would be ok because Alzheimer’s is “a kind of death.” Robertson explained, “I know it sounds cruel, but if he’s going to do something, he should divorce her and start all over again, but make sure she has custodial care and somebody looking after her.”

One way to provide for an ex-spouse with Alzheimer’s is through adult adoption. This option is expensive, but some of the expenses can be offset with a tax break. Currently, a refundable tax credit is available for qualified expenses the taxpayer pays to an adopt individual who is physically or mentally incapable of care for himself.

For federal income tax purposes, the ex-spouse will be treated as the taxpayer’ own child. However, as the taxpayer’s child, the adopted ex-spouse will not be eligible for the federal unlimited marital deduction. Instead, under current tax laws, the taxpayer can only make a $13,000 gift to the adopted ex-spouse without incurring federal gift tax consequences.

For more information on adult adoption of a spouse with Alzheimer’s, see Kelly Phillips Erb, “Death”, Alzheimer’s and Taxes: When “I Do” Turns Complicated, Forbes, Sep. 9, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.