Protecting moms assets from nursing home expenses

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leonidas
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Protecting moms assets from nursing home expenses

Post by leonidas » Tue Sep 05, 2017 3:14 pm

Hello.

My mother was having conversations with her friends and they bought up the topic of nursing homes depleting ones assets if not protected.
She then asked me what my opinion was and honestly I never really thought a lot about it before. She has a small house in upstate NY worth about 125k and 115k in cash. 1100/mo in SS. She is 74 years old. Very mobile but takes a load of meds for Blood pressure, cholesterol and other issues. I did some research on Trusts, life estates and other various ways to shelter some assets. Come across various rules like a 5 year look back from medicaid if she gives her property away. Just wondering what others have done in these circumstances.

Thank you.

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dm200
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Re: Protecting moms assets from nursing home expenses

Post by dm200 » Tue Sep 05, 2017 3:19 pm

leonidas wrote:
Tue Sep 05, 2017 3:14 pm
Hello.
My mother was having conversations with her friends and they bought up the topic of nursing homes depleting ones assets if not protected.
She then asked me what my opinion was and honestly I never really thought a lot about it before. She has a small house in upstate NY worth about 125k and 115k in cash. 1100/mo in SS. She is 74 years old. Very mobile but takes a load of meds for Blood pressure, cholesterol and other issues. I did some research on Trusts, life estates and other various ways to shelter some assets. Come across various rules like a 5 year look back from medicaid if she gives her property away. Just wondering what others have done in these circumstances.
Thank you.
Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.

Jags4186
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Re: Protecting moms assets from nursing home expenses

Post by Jags4186 » Tue Sep 05, 2017 3:24 pm

You can skip the nursing home expenses by having her stay at home with you and your family. Maybe you or your wife could leave your job to watch over her. After all, you have a potential $240k to protect so you should do your best to minimize expenses.

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leonidas
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Re: Protecting moms assets from nursing home expenses

Post by leonidas » Tue Sep 05, 2017 3:26 pm

Yeah, it's kind of the way the system is set up right. I'm pretty sure I funded others nursing home expenses too. From a family history perspective, none of my grandparents nor my father needed a nursing home, but it is prudent to take precautsions.

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Re: Protecting moms assets from nursing home expenses

Post by Jack FFR1846 » Tue Sep 05, 2017 3:30 pm

I guess I'd go tour some nursing homes. Look at ones that are private pay with the option after time to accept the income of the person like social security, pensions and annuity payments. Then look at medicaid nursing homes. Choose which you'd rather be in. <shrug>
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leonidas
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Re: Protecting moms assets from nursing home expenses

Post by leonidas » Tue Sep 05, 2017 3:33 pm

Jags4186 wrote:
Tue Sep 05, 2017 3:24 pm
You can skip the nursing home expenses by having her stay at home with you and your family. Maybe you or your wife could leave your job to watch over her. After all, you have a potential $240k to protect so you should do your best to minimize expenses.
Yes, this is our first and best option. We took care of my mother-in-law for several years in this manner. Other than a lack of mobility, she had no other major medical issues. Same with my dad for the last 2 years. This is my preferred route assuming that she wont need any specialized care.

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Re: Protecting moms assets from nursing home expenses

Post by marcopolo » Tue Sep 05, 2017 3:43 pm

dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.
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Re: Protecting moms assets from nursing home expenses

Post by Mlm » Tue Sep 05, 2017 3:47 pm

My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.
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Re: Protecting moms assets from nursing home expenses

Post by 4nwestsaylng » Tue Sep 05, 2017 3:54 pm

With good home health nursing and bath aides, try to keep her home and out of nursing homes, even if she needs some skilled care. I use the term "skilled nursing facility" (called "SNIF" in the business, really!) advisedly. They are money machines for REITS. Staff are usually poorly paid and stretched thin.

I provided care for my mother, who was bed confined with dementia, for three years and also worked from home by computer. It is not easy, but now that she is gone I am so glad that she had a nice room at home, and visiting nurses and bath aides brightened her spirits.

I know nursing homes, I must say I admire cultures such as the Hispanic and East Indian, who keep the family member in the family. They don't have nursing homes in their countries.

Thank goodness for them that they can't afford it, they are not missing anything.

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celia
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Re: Protecting moms assets from nursing home expenses

Post by celia » Tue Sep 05, 2017 4:26 pm

Isn't the point of saving for our Golden Years to have enough to pay for our own needs and wants? That is a lot better than not saving and having to depend on your kids or the government to take care of you. I don't mean that their kids may want to, eg., maybe they want you to babysit while they work, but that's another topic.

I had DPOA for an elderly relative for several years, who, as far as I could tell, had never added up the total of her assets. She had bank names and account numbers on several lists, but no balances, because, you know, balances keep changing. :oops: I doubt she knew her net worth. She certainly didn't think of her company stock and condo as assets. They were more like family history and a place to live.

The first thing I did was inventory the assets. If there weren't several years of living expenses, I was going to warn relatives that we had to come up with a plan and start helping financially. Everyone pitched it and took turns caring for her, but finances were, luckily, not an issue.


Unfortunately, we already have too many people who expect the government to pay for a lot of their expenses. That gives them little motivation to make good choices, in my opinion.

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Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Tue Sep 05, 2017 4:27 pm

Your mother doesn't have a lot of assets to protect, I'm not sure you need to do anything. She could stay in her home another 15-20 years, or could need skilled care next month, you just never know.

As mentioned above, most care for seniors is provided by family in the home - either the parent moves in with the child or vice versa. If your mom can manage around the house but just needs some help, you might need to prepare to help pay for that. If her house is paid for her expenses might be low, but daily help can add up.

If she does need to go into long term skilled nursing, the cost is likely to wipe her out quickly. It helps if she (or you) could commit to being self-pay for the first couple of years, the nicer facilities will do a pretty thorough vetting of her finances before they admit her, but once she is there they will let her stay. Or at least you can make sure she doesn't go to a place that will not make that commitment.

What is she worried about? Leaving you a legacy? Sounding informed in front of her friends? Feeling like she is 'doing something', not just waiting for an expense to happen?

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Re: Protecting moms assets from nursing home expenses

Post by leonidas » Tue Sep 05, 2017 4:36 pm

NotWhoYouThink wrote:
Tue Sep 05, 2017 4:27 pm
Your mother doesn't have a lot of assets to protect, I'm not sure you need to do anything. She could stay in her home another 15-20 years, or could need skilled care next month, you just never know.

As mentioned above, most care for seniors is provided by family in the home - either the parent moves in with the child or vice versa. If your mom can manage around the house but just needs some help, you might need to prepare to help pay for that. If her house is paid for her expenses might be low, but daily help can add up.

If she does need to go into long term skilled nursing, the cost is likely to wipe her out quickly. It helps if she (or you) could commit to being self-pay for the first couple of years, the nicer facilities will do a pretty thorough vetting of her finances before they admit her, but once she is there they will let her stay. Or at least you can make sure she doesn't go to a place that will not make that commitment.

What is she worried about? Leaving you a legacy? Sounding informed in front of her friends? Feeling like she is 'doing something', not just waiting for an expense to happen?
She definitely wants to leave us something for our kids. I told her that it's not a priority and to spend her money on herself for once. Some people are hard to change. From what I understand most of her friends had much higher assets than my mother to shield. Not sure 100k is worth it.

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Re: Protecting moms assets from nursing home expenses

Post by Carefreeap » Tue Sep 05, 2017 4:42 pm

Jack FFR1846 wrote:
Tue Sep 05, 2017 3:30 pm
I guess I'd go tour some nursing homes. Look at ones that are private pay with the option after time to accept the income of the person like social security, pensions and annuity payments. Then look at medicaid nursing homes. Choose which you'd rather be in. <shrug>
:thumbsup

The concern I have for my father who is a Medicaid recipient in San Diego is how long is the waiting list to get in? I suspect it could be years.

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Re: Protecting moms assets from nursing home expenses

Post by delamer » Tue Sep 05, 2017 4:49 pm

marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.

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Re: Protecting moms assets from nursing home expenses

Post by JBTX » Tue Sep 05, 2017 5:04 pm

delamer wrote:
Tue Sep 05, 2017 4:49 pm
marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I fully expect in the coming years those of us who have diligently saved for retirement will have to contribute to the vast majority who haven't saved (via higher tax rates, reduced SS or Medicare benefits, etc. ). If I could do something legally to help protect my parents assets or make them eligible for govt benefits earlier i wouldn't hesitate to do so.

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Re: Protecting moms assets from nursing home expenses

Post by delamer » Tue Sep 05, 2017 5:11 pm

JBTX wrote:
Tue Sep 05, 2017 5:04 pm
delamer wrote:
Tue Sep 05, 2017 4:49 pm
marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I fully expect in the coming years those of us who have diligently saved for retirement will have to contribute to the vast majority who haven't saved (via higher tax rates, reduced SS or Medicare benefits, etc. ). If I could do something legally to help protect my parents assets or make them eligible for govt benefits earlier i wouldn't hesitate to do so.
I am not sure if you are agreeing with me or not. Nothing wrong with conserving your parents' assets, as long as you don't compromise their care while doing so.

Whether we think our tax dollars are well spent or that the amount of taxes we pay is fair are beyond the scope of this forum.

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Re: Protecting moms assets from nursing home expenses

Post by Good Listener » Tue Sep 05, 2017 5:17 pm

Forgetting moral issues, she is only 74 and can live a long time in a healthy fashion at home. Jer social security is pretty small. If I were her child I would not allow her to gift away the relatively small amount of assets she has, about 250k. She may need it and she shouldn't have to count on the generosity of her kids. Gifting strategies don't protect her, they protect the heirs.

JBTX
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Re: Protecting moms assets from nursing home expenses

Post by JBTX » Tue Sep 05, 2017 5:39 pm

delamer wrote:
Tue Sep 05, 2017 5:11 pm
JBTX wrote:
Tue Sep 05, 2017 5:04 pm
delamer wrote:
Tue Sep 05, 2017 4:49 pm
marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I fully expect in the coming years those of us who have diligently saved for retirement will have to contribute to the vast majority who haven't saved (via higher tax rates, reduced SS or Medicare benefits, etc. ). If I could do something legally to help protect my parents assets or make them eligible for govt benefits earlier i wouldn't hesitate to do so.
I am not sure if you are agreeing with me or not. Nothing wrong with conserving your parents' assets, as long as you don't compromise their care while doing so.

Whether we think our tax dollars are well spent or that the amount of taxes we pay is fair are beyond the scope of this forum.
Agreeing with you.

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Re: Protecting moms assets from nursing home expenses

Post by chasingbutterflies » Tue Sep 05, 2017 7:32 pm

My parents worked with an estate attorney last year to protect the house. My father is getting home care now and they have sufficient assets to cover the next few years but my mother is in relatively good health and could live for years yet. The attorney set up a trust 'for the children' which holds the house. I'm the trustee and will use the house if necessary to help my mother. That is pretty risky however, as I could just run off with the house. Also the five year rule will apply if my father needs Medicaid before five years have passed. As I remember you could also set up a SPIA. Medicaid will look at your assets but doesn't really look at your income. I think there are state specific rules however. The big kicker is the 5 year 'look-back' rule, so it pays to look into this early.

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Re: Protecting moms assets from nursing home expenses

Post by 123 » Tue Sep 05, 2017 8:38 pm

Good Listener wrote:
Tue Sep 05, 2017 5:17 pm
...
Gifting strategies don't protect her, they protect the heirs.
+1 Indeed
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Re: Protecting moms assets from nursing home expenses

Post by leonidas » Tue Sep 05, 2017 8:56 pm

chasingbutterflies wrote:
Tue Sep 05, 2017 7:32 pm
My parents worked with an estate attorney last year to protect the house. My father is getting home care now and they have sufficient assets to cover the next few years but my mother is in relatively good health and could live for years yet. The attorney set up a trust 'for the children' which holds the house. I'm the trustee and will use the house if necessary to help my mother. That is pretty risky however, as I could just run off with the house. Also the five year rule will apply if my father needs Medicaid before five years have passed. As I remember you could also set up a SPIA. Medicaid will look at your assets but doesn't really look at your income. I think there are state specific rules however. The big kicker is the 5 year 'look-back' rule, so it pays to look into this early.
May I ask what kind of trust this was? It's still susceptible to the 5 year rule? I was also looking into a life estate for the home. But I will discuss with moms lawyer before we make any decisions.

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Re: Protecting moms assets from nursing home expenses

Post by bsteiner » Tue Sep 05, 2017 9:08 pm

leonidas wrote:
Tue Sep 05, 2017 8:56 pm

May I ask what kind of trust this was? It's still susceptible to the 5 year rule? I was also looking into a life estate for the home. But I will discuss with moms lawyer before we make any decisions.
The trust would provide that you get the income but you can't get principal. After 5 years (perhaps sooner here since the trust is small) the principal is protected, though you would have to contribute the income toward your care.

A life estate is similar though a trust is more flexible and makes it easier to get the capital gains exclusion on a sale and makes it easier to provide for contingencies.

You give up some control and flexibility, but that's often less of a concern with a residence.

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Re: Protecting moms assets from nursing home expenses

Post by spammagnet » Tue Sep 05, 2017 9:47 pm

delamer wrote:
Tue Sep 05, 2017 4:49 pm
... Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I think it's fair to say that many families take steps to preserve their elders' assets not to benefit from inheritance, but to increase the likelihood of the elders not being impoverished at the end of their lives.

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Re: Protecting moms assets from nursing home expenses

Post by LadyGeek » Tue Sep 05, 2017 10:24 pm

I want to address several comments related to asset management. For the record, discussions of dishonest behavior or bypassing the law are totally unacceptable.

The intent is to understand how to do this within the existing legal framework; in which case this discussion can continue.

Everything is a matter of degree. The choice of using a tax deferred account, e.g. IRA, to avoid taxes during some period of time is one extreme, managing assets to qualify for Medicaid is the other. Gifting assets to avoid taxes is somewhere in the middle. The bottom line is to work within the legal framework. Ethics is the ever present elephant in the room.

The approach is to educate members on how to do things legally. State your points in a factual manner. If the intent strays from this objective, please report the post and we'll investigate.
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chasingbutterflies
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Re: Protecting moms assets from nursing home expenses

Post by chasingbutterflies » Tue Sep 05, 2017 10:45 pm

In response to leonidas, it was an irrevocable trust and yes it is subject to the 5 year rule. They chose it for insurance more than anything else as their assets and long term care insurance will most likely cover expenses for those 5 years. Currently their insurance is covering home care for my father.

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Re: Protecting moms assets from nursing home expenses

Post by munemaker » Tue Sep 05, 2017 10:48 pm

Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.
If parents transferred the home to their children, then how did your mom sell it? Didn't it belong to the children?

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Re: Protecting moms assets from nursing home expenses

Post by munemaker » Tue Sep 05, 2017 10:51 pm

spammagnet wrote:
Tue Sep 05, 2017 9:47 pm
delamer wrote:
Tue Sep 05, 2017 4:49 pm
... Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I think it's fair to say that many families take steps to preserve their elders' assets not to benefit from inheritance, but to increase the likelihood of the elders not being impoverished at the end of their lives.
Both preserving assets for inheritance and helping to prevent impoverishment are valid goals, as long as the methods are legal.

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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Wed Sep 06, 2017 12:15 am

chasingbutterflies wrote:
Tue Sep 05, 2017 7:32 pm
My parents worked with an estate attorney last year to protect the house. My father is getting home care now and they have sufficient assets to cover the next few years but my mother is in relatively good health and could live for years yet. The attorney set up a trust 'for the children' which holds the house. I'm the trustee and will use the house if necessary to help my mother. That is pretty risky however, as I could just run off with the house. Also the five year rule will apply if my father needs Medicaid before five years have passed. As I remember you could also set up a SPIA. Medicaid will look at your assets but doesn't really look at your income. I think there are state specific rules however. The big kicker is the 5 year 'look-back' rule, so it pays to look into this early.
Would you mind elaborating on the trust? His comes up all the time here.

Does the trust give your father a life state, a right to live there until he dies? What is the process to sell the house if funds are needed to be raised to care for him? Who is the final decision maker?

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Re: Protecting moms assets from nursing home expenses

Post by celia » Wed Sep 06, 2017 12:17 am

chasingbutterflies wrote:
Tue Sep 05, 2017 7:32 pm
The attorney set up a trust 'for the children' which holds the house. I'm the trustee and will use the house if necessary to help my mother. That is pretty risky however, as I could just run off with the house.
We know you wouldn't do that as LadyGeek would kick you out of here! You were warned!

But seriously, if you do not act like a trustee is supposed to, there can be legal consequences. Therefore, I don't think it's too "risky".

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Re: Protecting moms assets from nursing home expenses

Post by heikejohn1 » Wed Sep 06, 2017 6:00 am

Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.
What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.

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Re: Protecting moms assets from nursing home expenses

Post by Jack FFR1846 » Wed Sep 06, 2017 6:41 am

This was brought up in another post, but not all nursing homes take medicaid. Not only nursing homes but rest homes and even assisted living facilities that are aided by some government money tend to have long waiting lists. Our relative, who I talked about, who was in a rest home following an accident has been on lists for assisted living apartments for well over 5 years. We just got notice that one expects an opening soon. So I'm not sure that spending down the relative's assets and weaseling money to relatives is a strategy that will work to let the government pay for care. If their condition gets to the point that skilled assistance is needed, you don't have 5 years for a bed to open. What do you do then? The answer might be that family now has the job to manage care. And even in home car needs management. It doesn't just happen. Our relative gets in home care and has been going downhill quickly. Unfortunately, the best paths for her have been resisted by her, and doctors have not been willing to label her incompetent so we can't do the logical things we'd like to.
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Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Wed Sep 06, 2017 6:59 am

Unless your mom is in poor health with a degenerative condition today, I think she is way to young to do anything like setting up trusts or giving away rights to her house for the purpose of defending against potential nursing home costs. At 74 she should get out and enjoy her life. As my dad used to say, she is at the place in her life she has been saving for, so she should think about what she wants to do and get out and do it. Maybe she'll want to sell her house some day and move to an apartment or condo to avoid the hassle of maintaining a house and yard, or maybe there are places she wants to visit.

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Re: Protecting moms assets from nursing home expenses

Post by spammagnet » Wed Sep 06, 2017 7:08 am

NotWhoYouThink wrote:
Wed Sep 06, 2017 6:59 am
Unless your mom is in poor health with a degenerative condition today, I think she is way to young to do anything like setting up trusts or giving away rights to her house for the purpose of defending against potential nursing home costs. ...
Too young? For giving away assets, yes; for setting up a trust, not necessarily. Nothing prevents her from using her trust as she chooses, including for travel. Consultation with a qualified attorney would help determine if/when a trust should be considered for her, in her personal circumstances.

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Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Wed Sep 06, 2017 7:36 am

spammagnet wrote:
Wed Sep 06, 2017 7:08 am
NotWhoYouThink wrote:
Wed Sep 06, 2017 6:59 am
Unless your mom is in poor health with a degenerative condition today, I think she is way to young to do anything like setting up trusts or giving away rights to her house for the purpose of defending against potential nursing home costs. ...
Too young? For giving away assets, yes; for setting up a trust, not necessarily. Nothing prevents her from using her trust as she chooses, including for travel. Consultation with a qualified attorney would help determine if/when a trust should be considered for her, in her personal circumstances.
Sorry, I meant a Medicaid trust which would, in fact, prevent her from using the money in it. She may or may not have a use for a revocable living trust, but that's another thread.

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Re: Protecting moms assets from nursing home expenses

Post by JW-Retired » Wed Sep 06, 2017 8:20 am

leonidas wrote:
Tue Sep 05, 2017 8:56 pm
May I ask what kind of trust this was? It's still susceptible to the 5 year rule? I was also looking into a life estate for the home. But I will discuss with moms lawyer before we make any decisions.
leonidas,
Mom has a lawyer? Sorry, it strikes me that your Mom's assets and SS income are just so tiny that this is all futile. IMO, you need to be figuring out how you are going to subsidize your Mom's expenses so she can stay in the house as long as possible. When she can't any longer, perhaps it can be sold to fund some other care home at least for a while.

Then after that won't it be on you?
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Re: Protecting moms assets from nursing home expenses

Post by book lover » Wed Sep 06, 2017 8:49 am

Speak to an Elder Law attorney who can guide you and your mom through these issues.

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leonidas
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Re: Protecting moms assets from nursing home expenses

Post by leonidas » Wed Sep 06, 2017 8:59 am

Scheduling a consultation with an Elder Law Atty by end of September. Right now just in an info gathering stage.

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Re: Protecting moms assets from nursing home expenses

Post by JGoneRiding » Wed Sep 06, 2017 9:11 am

leonidas wrote:
Tue Sep 05, 2017 3:26 pm
Yeah, it's kind of the way the system is set up right. I'm pretty sure I funded others nursing home expenses too. From a family history perspective, none of my grandparents nor my father needed a nursing home, but it is prudent to take precautsions.
Why??? She lacks sufficient assets to protect. if the time comes sell the house, spend everything she has on getting her a good place that will except Medicaid when the money runs out. When money LEGITAMETELLY runs out apply for and receive Medicaid, that is how it is suppose to work and is what her money should go for. Anything else is a scheme for YOUR benefit not hers

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Kenkat
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Re: Protecting moms assets from nursing home expenses

Post by Kenkat » Wed Sep 06, 2017 9:58 am

Jack FFR1846 wrote:
Wed Sep 06, 2017 6:41 am
This was brought up in another post, but not all nursing homes take medicaid. Not only nursing homes but rest homes and even assisted living facilities that are aided by some government money tend to have long waiting lists. Our relative, who I talked about, who was in a rest home following an accident has been on lists for assisted living apartments for well over 5 years. We just got notice that one expects an opening soon. So I'm not sure that spending down the relative's assets and weaseling money to relatives is a strategy that will work to let the government pay for care. If their condition gets to the point that skilled assistance is needed, you don't have 5 years for a bed to open. What do you do then? The answer might be that family now has the job to manage care. And even in home car needs management. It doesn't just happen. Our relative gets in home care and has been going downhill quickly. Unfortunately, the best paths for her have been resisted by her, and doctors have not been willing to label her incompetent so we can't do the logical things we'd like to.
This largely parallels our experience with my in-laws. They had roughly the same assets (around $250k) plus decent current income from pension and social security. While they very much wanted to leave something to their children, our goal was to get them in a decent care facility of our and their choosing that would keep them if they ran out of assets. There is a qualification process that occurs and if you have given away all of the assets or made them unavailable via trusts, they may not get accepted.

It is a delicate balancing act but at that level of assets I would be inclined to make inheritance a secondary priority. In our case, father in law was in skilled nursing care for less than a week before passing, and mother in law about 3 months before her passing. In the end, most of their assets were still able to be distributed to heirs.

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Re: Protecting moms assets from nursing home expenses

Post by Carefreeap » Wed Sep 06, 2017 9:59 am

JBTX wrote:
Tue Sep 05, 2017 5:04 pm
delamer wrote:
Tue Sep 05, 2017 4:49 pm
marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I fully expect in the coming years those of us who have diligently saved for retirement will have to contribute to the vast majority who haven't saved (via higher tax rates, reduced SS or Medicare benefits, etc. ). If I could do something legally to help protect my parents assets or make them eligible for govt benefits earlier i wouldn't hesitate to do so.
Or bail out irresponsible/reckless parents who failed to plan for their own retirement. :oops:

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Re: Protecting moms assets from nursing home expenses

Post by Whakamole » Wed Sep 06, 2017 10:02 am

leonidas wrote:
Wed Sep 06, 2017 8:59 am
Scheduling a consultation with an Elder Law Atty by end of September. Right now just in an info gathering stage.
You may want to talk to the lawyer first. My parents were hell-bent on something like this, and in their state of residence, it turned out not very much was needed.

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Re: Protecting moms assets from nursing home expenses

Post by chasingbutterflies » Wed Sep 06, 2017 11:00 am

What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.
I've not done it, but it shouldn't be too difficult. As trustee/beneficiary I 'own' the house but my parents cover all of the maintenance, taxes, insurance etc. I don't really have to do anything other than deal with my dad's "well the landlord hasn't kicked me out yet" jokes. When my father dies I anticipate my mother will want to 'downsize'. When the time comes she can put up the house and choose another. I just have to be there at the end to sign the paperwork as the trustee and deal with any potential proceeds from the sale. Mind you the lawyer will be involved and will help, but I don't anticipate a problem.

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Re: Protecting moms assets from nursing home expenses

Post by Mlm » Wed Sep 06, 2017 1:11 pm

heikejohn1 wrote:
Wed Sep 06, 2017 6:00 am
Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.
What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.
My mother and each child had to sign all of the sale paperwork. This can be done by signing a limited POA for this purpose. The proceeds were split between each child and my mother according to her remaining life use. A real estate attorney made the process easy. The hard part was determining the capital gains since the date it was converted. Thankfully, my parents kept every receipt well organized so there ended up being no Capital Gain.
Reality has a way of catching up with you

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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Wed Sep 06, 2017 1:14 pm

Mlm wrote:
Wed Sep 06, 2017 1:11 pm
heikejohn1 wrote:
Wed Sep 06, 2017 6:00 am
Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.

What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.
My mother and each child had to sign all of the sale paperwork. This can be done by signing a limited POA for this purpose. The proceeds were split between each child and my mother according to her remaining life use. A real estate attorney made the process easy. The hard part was determining the capital gains since the date it was converted. Thankfully, my parents kept every receipt well organized so there ended up being no Capital Gain.
If it was set up as a life estate, would that have given Medicaid protection? And would the basis have been stepped up at time of death?

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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Wed Sep 06, 2017 1:14 pm

Mlm wrote:
Wed Sep 06, 2017 1:11 pm
heikejohn1 wrote:
Wed Sep 06, 2017 6:00 am
Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.

What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.
My mother and each child had to sign all of the sale paperwork. This can be done by signing a limited POA for this purpose. The proceeds were split between each child and my mother according to her remaining life use. A real estate attorney made the process easy. The hard part was determining the capital gains since the date it was converted. Thankfully, my parents kept every receipt well organized so there ended up being no Capital Gain.
If it was set up as a life estate, would that have given Medicaid protection? And would the basis have been stepped up at time of death?

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Mlm
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Re: Protecting moms assets from nursing home expenses

Post by Mlm » Wed Sep 06, 2017 1:17 pm

munemaker wrote:
Tue Sep 05, 2017 10:48 pm
Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.
If parents transferred the home to their children, then how did your mom sell it? Didn't it belong to the children?
Mom had life use too so all of us had to sign to sell it. I would not recommend transferring the house like my parents did. The children had no idea they did it until many years later. We never would have recommended it due to the capital gains tax it could have generated over the next 20+ years later. A trust would have been a much better idea.
Reality has a way of catching up with you

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Re: Protecting moms assets from nursing home expenses

Post by JBTX » Wed Sep 06, 2017 1:44 pm

Carefreeap wrote:
Wed Sep 06, 2017 9:59 am
JBTX wrote:
Tue Sep 05, 2017 5:04 pm
delamer wrote:
Tue Sep 05, 2017 4:49 pm
marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.

This is an excellent point, and one that I had not considered previously. Reducing the taxes you pay is really no different than having the government pay your expenses. As long as both are done legally, then I have no objection to either.

Having said that, we all have an obligation to see that our elders' money is used to get them the best care possible rather than being saved to benefit their heirs.
I fully expect in the coming years those of us who have diligently saved for retirement will have to contribute to the vast majority who haven't saved (via higher tax rates, reduced SS or Medicare benefits, etc. ). If I could do something legally to help protect my parents assets or make them eligible for govt benefits earlier i wouldn't hesitate to do so.
Or bail out irresponsible/reckless parents who failed to plan for their own retirement. :oops:
Thankfully that isn't the case for either my parents or my wife's. I consider ourselves very lucky in that regard.

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KlingKlang
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Re: Protecting moms assets from nursing home expenses

Post by KlingKlang » Wed Sep 06, 2017 4:19 pm

leonidas wrote:
Wed Sep 06, 2017 8:59 am
Scheduling a consultation with an Elder Law Atty by end of September. Right now just in an info gathering stage.
Gather a lot of info. The quality of Elder Law Attorneys varies greatly. Beware of the 'plan that's perfect for everyone' sales pitch.

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Re: Protecting moms assets from nursing home expenses

Post by Carefreeap » Wed Sep 06, 2017 5:18 pm

FoolStreet wrote:
Wed Sep 06, 2017 1:14 pm
Mlm wrote:
Wed Sep 06, 2017 1:11 pm
heikejohn1 wrote:
Wed Sep 06, 2017 6:00 am
Mlm wrote:
Tue Sep 05, 2017 3:47 pm
My parents transferred their home to all of their children when they retired and they retained life use. My mother decided to sell the house and move to a senior friendly apartment at the age of 86 after my father passed. Neither Dad not Mom ever needed skilled nursing care for more than a few weeks.

What is the process of your Mom selling the house which is not in her name anymore?
My In-Laws did the same, and I'm expecting a bureaucratic nightmare.
My mother and each child had to sign all of the sale paperwork. This can be done by signing a limited POA for this purpose. The proceeds were split between each child and my mother according to her remaining life use. A real estate attorney made the process easy. The hard part was determining the capital gains since the date it was converted. Thankfully, my parents kept every receipt well organized so there ended up being no Capital Gain.
If it was set up as a life estate, would that have given Medicaid protection? And would the basis have been stepped up at time of death?
Medicaid requirements vary State by State. In CA a life estate is an exempt asset.

I think it's Bsteiner and sometimes Gill have written about the step up value at time of death for the life estate beneficiary. IIRC the rationale is that a transfer with a life estate really isn't a beneficial interest in the property since the grantee retains possession and control of the property.
See IRC Sec. 2036

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Re: Protecting moms assets from nursing home expenses

Post by cherijoh » Wed Sep 06, 2017 5:41 pm

marcopolo wrote:
Tue Sep 05, 2017 3:43 pm
dm200 wrote:
Tue Sep 05, 2017 3:19 pm

Another way, as accurate in my opinion, is asking how to have the taxpayers fund her nursing home expenses so that her family can have and keep her funds.
I completely understand the sentiment, and mostly agree with it. But, i do sometimes question whether this is really any different than say managing income to qualify for ACA credits, using Roth conversions to reduce taxes, doing tax gain harvesting at 0% cap gains, etc. All of those reduce your expenses, and the lost revenue to the government has to be made up by everybody else's taxes.
Not quite the same in my opinion - except for qualifying for ACA credits when your assets place you nowhere near the poverty level. Doing Roth conversions and minimizing cap gains taxes is simply prudent tax management under a complex tiered tax system. It come down to a pay now vs. pay later decision. You aren't expecting the "government" (i.e., other taxpayers) to cover an expense that you have the money to cover yourself.

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