Protecting moms assets from nursing home expenses

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FoolStreet
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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Wed Sep 06, 2017 6:02 pm

Carefreeap wrote:
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
Thanks! This seems to make the most sense, but one would want to know that the trustee could sell the house for benefit of the life estate person, for example to downsize or to use the money to buy in to a continuing care facility, etc. Separately, it would also be worth checking with a mortgage broker to confirm that a refinance could be done in the trustee's name and whether they could claim owner occupied or have to be on-owner occupied.

Carefreeap
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Re: Protecting moms assets from nursing home expenses

Post by Carefreeap » Wed Sep 06, 2017 8:24 pm

FoolStreet wrote:
Wed Sep 06, 2017 6:02 pm
Carefreeap wrote:
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



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
Thanks! This seems to make the most sense, but one would want to know that the trustee could sell the house for benefit of the life estate person, for example to downsize or to use the money to buy in to a continuing care facility, etc. Separately, it would also be worth checking with a mortgage broker to confirm that a refinance could be done in the trustee's name and whether they could claim owner occupied or have to be on-owner occupied.
Depending on the language of the Trust, the Trustee likely has power to sell the property. Taking out a mortgage in the Trustee's name could be problematic. The Trust probably allows the Trustee pledge or borrow against the assets of the Trust but the issue is whether the Trust is generating enough income to qualify for the mortgage? The Trust wouldn't have the SS or pension income of the life estate beneficiary since those income streams are specific to the person.

WhyNotUs
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Re: Protecting moms assets from nursing home expenses

Post by WhyNotUs » Wed Sep 06, 2017 10:47 pm

Some states allow the individual's home to be excluded from Medicaid for nursing home.
Personally, I am with the person who suggested finding a good situation (if not at home) that will allow your mother to stay after her funds run out.

My mom attended a senior center program and one day they had a elder law attorney speak and he gave out info about arranging assets to preserve them while receiving public benefits. It made my stomach hurt. He called her to follow up and I got his phone number and said that if he called again I would call the state bar about his tactics.

Like your mom, my mom did not have much to worry about but many of the people in her senior group had substantial real estate holdings. IMO, those types of maneuvers destroy support for public programs and ultimately hurt the people who really do not have resources. We cared for my mom until her death at home and it was a lovely but challenging service.
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CULater
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Re: Protecting moms assets from nursing home expenses

Post by CULater » Thu Sep 07, 2017 10:07 am

I have been speaking with an elder law attorney recently, and learned of a way to preserve some of the person's assets while qualifying for Medicaid assistance. Essentially, this is based on having the person gift a portion of their assets to a trusted person, family member. Any gifts are subject to the 5-year lookback by Medicaid. For gifted assets within the lookback period, Medicaid payments are deferred for a penalty period calculated in months which is determined by dividing the dollar amount of the gifted assets by a constant dollar amount; e.g., $5,000. For example, if $100,000 were gifted within the lookback period the penalty period before Medicaid payments could begin would be 20 months. If the person has retained sufficient funds, they can then bridge this period by using their own funds to self-pay. For example, if the person gifted $100,000 and retained $140,000 and the cost of nursing home care were $7,000 per month, the person could bridge the penalty period with their own money until Medicaid starts. The gifted $100,000 is thereby preserved and the person does not need to spend down to the impoverishment level in order to begin Medicaid coverage. The trusted giftee can then use this money as needed to pay expenses for the person that are not covered by Medicaid, and in the event the person dies the $100,000 or remaining portion is preserved for heirs.

An elder law attorney should be consulted to determine the application of Medicaid rules in your locality and to provide legal guidance for implementing this strategy. For example, if the person is not legally competent then gifting must be implemented by power of attorney and the POA must be written to allow gifting.
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vested1
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Re: Protecting moms assets from nursing home expenses

Post by vested1 » Thu Sep 07, 2017 10:32 am

Threads like this tend to concentrate on the ethical issues of transitioning to Medicaid, while retaining a legacy once assets are exhausted. In our case, no one in my wife's family cares about a legacy, other than my MIL. She is under the impression that her savings still exist, which we don't correct in order to ease her mind.

The unspoken issues are the onerous charges that drain the accounts of those who saved diligently their entire lives, and the outrageous cost and restrictions of LTC insurance that cause most to avoid it. The game is rigged. My 94 year old MIL requires skilled nursing and resides in a care facility that is lower in cost than most in our area at $8,500 a month. She exhausted her substantial savings and assets, and although we offered as the last remaining relatives to have her stay at our home, we are unable to lift her and provide the care that she needs because of our age. If we opted for home care the cost is even higher, and believe me, we checked. She is now on Medicaid and has been for over a year.

The burden for the taxpayer to subsidize these costs are multiplied millions of times in similar situations across the nation. The microscope is focused on the family, and the supposed nefarious intent to pilfer assets at the expense of the taxpayer. No thought is given to the justification for the bills.

In my opinion the costs are artificially high for this service, and until they are reigned in we will all be held hostage for the care of our elderly loved ones. After all, if Medicaid will foot the bill, why make the costs more reasonable?

As for my family, my parents also lived into their 90's and stayed in their home until death, cared for by my retired sisters in a distant area of the State. The rest of us who continued to have employment responsibilities visited and helped on weekends. The challenges of this commitment cannot be overstated. It's a shame that our elderly face such financial peril, especially after being productive members who checked all the boxes and followed the rules their entire lives.

munemaker
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Re: Protecting moms assets from nursing home expenses

Post by munemaker » Thu Sep 07, 2017 11:08 am

Mlm wrote:
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.
I don't know how this works for Medicare, but for PA Inheritance Tax (which I have some experience with), sale of property where the seller maintains a beneficial use is still considered part of the estate and PA inheritance tax is due on it.

chicagoan23
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Re: Protecting moms assets from nursing home expenses

Post by chicagoan23 » Thu Sep 07, 2017 11:47 am

vested1 wrote:
Thu Sep 07, 2017 10:32 am
Threads like this tend to concentrate on the ethical issues of transitioning to Medicaid, while retaining a legacy once assets are exhausted. In our case, no one in my wife's family cares about a legacy, other than my MIL. She is under the impression that her savings still exist, which we don't correct in order to ease her mind.

The unspoken issues are the onerous charges that drain the accounts of those who saved diligently their entire lives, and the outrageous cost and restrictions of LTC insurance that cause most to avoid it. The game is rigged. My 94 year old MIL requires skilled nursing and resides in a care facility that is lower in cost than most in our area at $8,500 a month. She exhausted her substantial savings and assets, and although we offered as the last remaining relatives to have her stay at our home, we are unable to lift her and provide the care that she needs because of our age. If we opted for home care the cost is even higher, and believe me, we checked. She is now on Medicaid and has been for over a year.

The burden for the taxpayer to subsidize these costs are multiplied millions of times in similar situations across the nation. The microscope is focused on the family, and the supposed nefarious intent to pilfer assets at the expense of the taxpayer. No thought is given to the justification for the bills.

In my opinion the costs are artificially high for this service, and until they are reigned in we will all be held hostage for the care of our elderly loved ones. After all, if Medicaid will foot the bill, why make the costs more reasonable?

As for my family, my parents also lived into their 90's and stayed in their home until death, cared for by my retired sisters in a distant area of the State. The rest of us who continued to have employment responsibilities visited and helped on weekends. The challenges of this commitment cannot be overstated. It's a shame that our elderly face such financial peril, especially after being productive members who checked all the boxes and followed the rules their entire lives.
Thank you for sharing this, I agree 100%. I'm sorry to read about what happened to your mother-in-law. While the costs of nursing home care are very high, I also believe that the public, through Medicaid or otherwise, has an obligation to provide the needed care.

For some reason, it is considered "immoral" to take perfectly legal actions in order to avoid total financial ruin due to end-of-life care. Even for someone who paid into Medicaid through income taxes over many years of working, and now supposedly must exhaust all of their other resources too before getting any public benefit. What is moral about forcing those who saved over decades of work to spend all of that money on basic care and housing at the end of their life? It seems like some posters here may also have a problem with taxpayers footing the bill for kids to go to public school, as they are the ones using the system so their parents should pay for it all, right? Taxpayers taking care of the elderly should be among the highest priorities of a just society.

If an elderly parent has a use for their nest egg, by all means they should spend it or enjoy it, down to zero if they wish. It's their money. If, however, they are at a stage of life where a few hundred thousand dollars--or much, much more--has little to no utility to them (they can't travel, they aren't buying new cars, their house is paid for, etc.) then I see no reason for them to hold those assets in their own name. I would transfer the assets to the heirs as quickly as possible. I wouldn't even use a trust. The heirs can always pay for the private nursing home care out of their own pocket if they want to, or if their parent asks them to, assuming they aren't operating under a sinister plan to use their elderly parents' money as a windfall.

To the OP, I would suggest you aggressively pursue all available asset protection planning strategies as soon as possible. Get the clock running. Your mother has earned it.

Katietsu
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Re: Protecting moms assets from nursing home expenses

Post by Katietsu » Thu Sep 07, 2017 12:21 pm

I would second the advice that one be very careful about setting up a trust through an elder care attorney. For a while, we had two elder law attorneys doing monthly "free" lunches to aggressively seek clients. Everyone who met with them was essentially sold a fill in the blank irrevocable trust that the lawyer had purchased from somewhere. I saw several of these sold inappropriately, IMO.

NotWhoYouThink
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Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Thu Sep 07, 2017 12:43 pm

OP is talking about a 74 year old woman with modest assets who is now living independently. And talking with her friends about asset protection.

She may be active and independent for another decade or two, I fail to see the logic in giving away all her worldly possessions now, to her heirs or to a trust, just on the off chance that she may someday need long term care. She could die in a kayaking accident before that ever happens.

OP should be thinking about helping mom live her best life, with asset protection as a lower priority. In this case, consider treating the elder care attorney the same way you would treat an annuity salesman. If not as a hardened criminal, at least as someone who doesn't make money unless you buy something. The elder care attorney is supposed to work for you (or mom), but in reality has a product to sell and may well try to sell it whether it makes sense for your family or not. Buyer beware.

Doom&Gloom
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Re: Protecting moms assets from nursing home expenses

Post by Doom&Gloom » Thu Sep 07, 2017 12:58 pm

NotWhoYouThink wrote:
Thu Sep 07, 2017 12:43 pm
OP is talking about a 74 year old woman with modest assets who is now living independently. And talking with her friends about asset protection.

She may be active and independent for another decade or two, I fail to see the logic in giving away all her worldly possessions now, to her heirs or to a trust, just on the off chance that she may someday need long term care. She could die in a kayaking accident before that ever happens.

OP should be thinking about helping mom live her best life, with asset protection as a lower priority. In this case, consider treating the elder care attorney the same way you would treat an annuity salesman. If not as a hardened criminal, at least as someone who doesn't make money unless you buy something. The elder care attorney is supposed to work for you (or mom), but in reality has a product to sell and may well try to sell it whether it makes sense for your family or not. Buyer beware.
+1

My 89 y/o MIL set up an irrevocable trust about a year ago, but her situation was a bit different from OP's. AFAICT it is totally appropriate in her case.

But a point mentioned above that I don't think receives enough attention or emphasis is: never underestimate the power of the elderly talking, gossiping, and swapping (mostly) misinformation among their elderly friends. From what little I have observed, their desires and wishes are often driven by something that is mentioned almost in passing by someone who they trust or like but who doesn't have any background at all in these issues.

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Re: Protecting moms assets from nursing home expenses

Post by Whakamole » Thu Sep 07, 2017 1:35 pm

chicagoan23 wrote:
Thu Sep 07, 2017 11:47 am
Thank you for sharing this, I agree 100%. I'm sorry to read about what happened to your mother-in-law. While the costs of nursing home care are very high, I also believe that the public, through Medicaid or otherwise, has an obligation to provide the needed care.

For some reason, it is considered "immoral" to take perfectly legal actions in order to avoid total financial ruin due to end-of-life care. Even for someone who paid into Medicaid through income taxes over many years of working, and now supposedly must exhaust all of their other resources too before getting any public benefit. What is moral about forcing those who saved over decades of work to spend all of that money on basic care and housing at the end of their life? It seems like some posters here may also have a problem with taxpayers footing the bill for kids to go to public school, as they are the ones using the system so their parents should pay for it all, right? Taxpayers taking care of the elderly should be among the highest priorities of a just society.

If an elderly parent has a use for their nest egg, by all means they should spend it or enjoy it, down to zero if they wish. It's their money. If, however, they are at a stage of life where a few hundred thousand dollars--or much, much more--has little to no utility to them (they can't travel, they aren't buying new cars, their house is paid for, etc.) then I see no reason for them to hold those assets in their own name. I would transfer the assets to the heirs as quickly as possible. I wouldn't even use a trust. The heirs can always pay for the private nursing home care out of their own pocket if they want to, or if their parent asks them to, assuming they aren't operating under a sinister plan to use their elderly parents' money as a windfall.

To the OP, I would suggest you aggressively pursue all available asset protection planning strategies as soon as possible. Get the clock running. Your mother has earned it.
How does OP's mother shifting her assets to family instead of using it to pay for nursing home coverage benefit her? Either way the money is gone, she would qualify for a Medicaid-paid nursing home either because she spent all her money on nursing home care, or because she gave her assets away to her kids. Either way she is destitute.

This type of asset protection is rarely about protecting the elderly, but rather about protecting an inheritance.

RudyS
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Re: Protecting moms assets from nursing home expenses

Post by RudyS » Thu Sep 07, 2017 3:17 pm

Keep in mind, Medicaid facilities are not the same as I might choose if I had the means to pay myself. My preferred solution to this "problem" is by entering a Type A CCRC (continuing care retirement community). Once in, they assume the cost of higher level care if needed. Of course, you have to have the buy-in price and the ability to make the monthly payments, and be in good enough health to qualify for admittance..

munemaker
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Re: Protecting moms assets from nursing home expenses

Post by munemaker » Thu Sep 07, 2017 3:44 pm

cherijoh wrote:
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.
Within the laws/code established for taxes and various government programs, there is nothing wrong with adjusting your circumstances to the degree possible to qualify for government programs...student aid, food stamps, free student lunches, ObamaCare, subsidized housing, Social Security, Medicaid benefits, Medicare premiums, whatever. The government makes the rules, we follow them. It is not our responsibility to second guess the intent of laws and regulations. Maximizing benefits is similar to minimizing taxes in that you are taking whatever legal steps you can to maximize your financial position. Now if you misrepresent your situation, that is fraud.

chicagoan23
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Re: Protecting moms assets from nursing home expenses

Post by chicagoan23 » Thu Sep 07, 2017 3:55 pm

Whakamole wrote:
Thu Sep 07, 2017 1:35 pm

How does OP's mother shifting her assets to family instead of using it to pay for nursing home coverage benefit her? Either way the money is gone, she would qualify for a Medicaid-paid nursing home either because she spent all her money on nursing home care, or because she gave her assets away to her kids. Either way she is destitute.

This type of asset protection is rarely about protecting the elderly, but rather about protecting an inheritance.
I don't view the two scenarios in bold above as leaving the elderly mother in the same position, at all.

vested1
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Re: Protecting moms assets from nursing home expenses

Post by vested1 » Thu Sep 07, 2017 4:23 pm

chicagoan23 wrote:
Thu Sep 07, 2017 3:55 pm
Whakamole wrote:
Thu Sep 07, 2017 1:35 pm

How does OP's mother shifting her assets to family instead of using it to pay for nursing home coverage benefit her? Either way the money is gone, she would qualify for a Medicaid-paid nursing home either because she spent all her money on nursing home care, or because she gave her assets away to her kids. Either way she is destitute.

This type of asset protection is rarely about protecting the elderly, but rather about protecting an inheritance.


I don't view the two scenarios in bold above as leaving the elderly mother in the same position, at all.
The statement in bold is an assumption not based in fact, or rather, is an opinion. It's easy to assume the worst, but a bit harder to juggle the wishes of an elderly parent who has contributed their utmost to society and whose aim was to leave a legacy. I'm sure there are those who are rubbing their hands together at the prospect of an inheritance, which is something I fail to grasp.

In my MIL's case, her deceased husband was a decorated veteran of WWII, a fire captain, and a devoted volunteer his entire life who would give you the shirt off his back. She was a housewife, raising 4 children, paying her taxes and living her life as a model citizen. Her children are all successful and don't need or want an inheritance. She supported those older than her in their old age through her and her husbands lifelong commitment to paying their taxes.

The injustice is the outlandish costs of elder care, which in my opinion are designed to suck every last drop of a person's wealth and dignity from them; hollow thanks for a productive life spent living by the rules.

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Re: Protecting moms assets from nursing home expenses

Post by cherijoh » Thu Sep 07, 2017 4:42 pm

celia wrote:
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".
Speaking in general (not specifically about Bogleheads) I'm not sure I agree with the lack of risk. Elder financial abuse is more common than you think and quite a bit of it comes from family members, sad to say.

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Re: Protecting moms assets from nursing home expenses

Post by Whakamole » Thu Sep 07, 2017 5:25 pm

vested1 wrote:
Thu Sep 07, 2017 4:23 pm
The statement in bold is an assumption not based in fact, or rather, is an opinion. It's easy to assume the worst, but a bit harder to juggle the wishes of an elderly parent who has contributed their utmost to society and whose aim was to leave a legacy. I'm sure there are those who are rubbing their hands together at the prospect of an inheritance, which is something I fail to grasp.

In my MIL's case, her deceased husband was a decorated veteran of WWII, a fire captain, and a devoted volunteer his entire life who would give you the shirt off his back. She was a housewife, raising 4 children, paying her taxes and living her life as a model citizen. Her children are all successful and don't need or want an inheritance. She supported those older than her in their old age through her and her husbands lifelong commitment to paying their taxes.

The injustice is the outlandish costs of elder care, which in my opinion are designed to suck every last drop of a person's wealth and dignity from them; hollow thanks for a productive life spent living by the rules.
I fail to see how asset protection addresses the outlandish costs of elder care. I'm certainly open to the idea that it does, but I'm curious as to how this works.

Your description of people who live by the rules and pay taxes their whole lives applies to a lot of people. Notably, it applies to people whose taxes are now paying for nursing homes so that other people can leave a legacy.

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Re: Protecting moms assets from nursing home expenses

Post by LadyGeek » Thu Sep 07, 2017 6:54 pm

General rants on health care costs are off-topic. Please stay focused on the personal finance aspects and state your comments in a civil, factual manner.
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Re: Protecting moms assets from nursing home expenses

Post by gasdoc » Thu Sep 07, 2017 7:15 pm

I also believe this crosses the line, and should not be encouraged. The purpose of Medicaid (and ACA subsidies, for that matter), is to provide a safety net for those that are at or near the poverty level. I can't get past the ethics in this... If Mom has the money to pay for at least a part of her skilled nursing care, that is what it should used for, IMO. I agree with a previous poster, that you should be looking for the best nursing facility that will accept Mom's cash now, and commit to accepting Medicaid when the time comes. That is in the best interest of both Mom and society-at-large, again, IMO.

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TravelforFun
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Re: Protecting moms assets from nursing home expenses

Post by TravelforFun » Thu Sep 07, 2017 7:36 pm

Who would want to give away all their assets to others including their kids so they can stay in a government assisted facility?

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Re: Protecting moms assets from nursing home expenses

Post by pintail07 » Thu Sep 07, 2017 7:43 pm

TravelforFun wrote:
Thu Sep 07, 2017 7:36 pm
Who would want to give away all their assets to others including their kids so they can stay in a government assisted facility?
Baffles me why one would do that.

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Re: Protecting moms assets from nursing home expenses

Post by whomever » Thu Sep 07, 2017 7:47 pm

Disclaimer about my personal ethics: we could be getting ACA subsidies, and are choosing not to. I have foregone unemployment in the past. We have arranged our finances so we can (probably, modulo Great Depression, etc) self fund several years of assisted living if we're unlucky enough to do it. We don't have kids, so whatever is left over goes to charity.

On the ethics angle, though, I propose a hypothetical: Adam and Bob have had identical incomes. Adam was frugal and has a nest egg. Bob wasn't frugal and spent it on fast cars and high living (or alternatively, Adam's kids go to State U while Bob sends his to Ivy U). When they need care, Bob is broke and the taxpayers pay. Adam makes whatever legal arrangements he can to give the nest egg to his kids. For the sake of discussion, let's posit that the nest egg Adam transfers to his kids is less than Bob spent on high rolling (or alternatively less than the difference in education expenses that Bob already transferred to his kids).

I'm not sure I can make out Adam as the complete villain. I hear the argument that he could pay but isn't - but Bob could just have easily paid as well. I'm not sure that the fact Bob got rid of his money early makes him a saint, or that Adam trying to transfer his money now makes him a sinner. I don't think I'd do it myself, but then I skipped taking unemployment when entitled, and am skipping ACA subsidies now. I guess I see a lot of gray in the picture, and not so much black and white.

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Re: Protecting moms assets from nursing home expenses

Post by Dottie57 » Thu Sep 07, 2017 7:48 pm

chicagoan23 wrote:
Thu Sep 07, 2017 3:55 pm
Whakamole wrote:
Thu Sep 07, 2017 1:35 pm

How does OP's mother shifting her assets to family instead of using it to pay for nursing home coverage benefit her? Either way the money is gone, she would qualify for a Medicaid-paid nursing home either because she spent all her money on nursing home care, or because she gave her assets away to her kids. Either way she is destitute.

This type of asset protection is rarely about protecting the elderly, but rather about protecting an inheritance.
I don't view the two scenarios in bold above as leaving the elderly mother in the same position, at all.
I agree with Whakamole. In either case OP's mother doesn't have money. Why isn't this the same? No money = No money.

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Re: Protecting moms assets from nursing home expenses

Post by Dottie57 » Thu Sep 07, 2017 7:56 pm

whomever wrote:
Thu Sep 07, 2017 7:47 pm
Disclaimer about my personal ethics: we could be getting ACA subsidies, and are choosing not to. I have foregone unemployment in the past. We have arranged our finances so we can (probably, modulo Great Depression, etc) self fund several years of assisted living if we're unlucky enough to do it. We don't have kids, so whatever is left over goes to charity.

On the ethics angle, though, I propose a hypothetical: Adam and Bob have had identical incomes. Adam was frugal and has a nest egg. Bob wasn't frugal and spent it on fast cars and high living (or alternatively, Adam's kids go to State U while Bob sends his to Ivy U). When they need care, Bob is broke and the taxpayers pay. Adam makes whatever legal arrangements he can to give the nest egg to his kids. For the sake of discussion, let's posit that the nest egg Adam transfers to his kids is less than Bob spent on high rolling (or alternatively less than the difference in education expenses that Bob already transferred to his kids).

I'm not sure I can make out Adam as the complete villain. I hear the argument that he could pay but isn't - but Bob could just have easily paid as well. I'm not sure that the fact Bob got rid of his money early makes him a saint, or that Adam trying to transfer his money now makes him a sinner. I don't think I'd do it myself, but then I skipped taking unemployment when entitled, and am skipping ACA subsidies now. I guess I see a lot of gray in the picture, and not so much black and white.
Story of the Ant and the grasshopper. Grasshopper doesn't have much. Ant gets a more comfortable life in better facility. Life isn't fair. But I have co-workers who are trying to. Save their inheritances while complaining about those on other government programs. It really bothers me and yes we have had discussions.

JGoneRiding
Posts: 987
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Re: Protecting moms assets from nursing home expenses

Post by JGoneRiding » Thu Sep 07, 2017 8:00 pm

vested1 wrote:
Thu Sep 07, 2017 10:32 am
Threads like this tend to concentrate on the ethical issues of transitioning to Medicaid, while retaining a legacy once assets are exhausted. In our case, no one in my wife's family cares about a legacy, other than my MIL. She is under the impression that her savings still exist, which we don't correct in order to ease her mind.



The burden for the taxpayer to subsidize these costs are multiplied millions of times in similar situations across the nation. The microscope is focused on the family, and the supposed nefarious intent to pilfer assets at the expense of the taxpayer. No thought is given to the justification for the bills.

In my opinion the costs are artificially high for this service, and until they are reigned in we will all be held hostage for the care of our elderly loved ones. After all, if Medicaid will foot the bill, why make the costs more reasonable?

As for my family, my parents also lived into their 90's and stayed in their home until death, cared for by my retired sisters in a distant area of the State. The rest of us who continued to have employment responsibilities visited and helped on weekends. The challenges of this commitment cannot be overstated. It's a shame that our elderly face such financial peril, especially after being productive members who checked all the boxes and followed the rules their entire lives.
I Want to point out that it is in fact that to many people are on Medicaid that the costs for the others are so high not the other way around. Medicaid pays substationally less, the other people in a home make up for the cost of the Medicaid patients

Gill
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Location: Florida

Re: Protecting moms assets from nursing home expenses

Post by Gill » Thu Sep 07, 2017 8:03 pm

Carefreeap wrote:
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
I've written about it numerous times. Quite simply, if a transfer is made with a retained life estate, the asset transferred is included in the transferor's estate and receives a full step up in basis.
Gill

FoolStreet
Posts: 425
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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Fri Sep 08, 2017 12:16 am

vested1 wrote:
Thu Sep 07, 2017 10:32 am
Threads like this tend to concentrate on the ethical issues of transitioning to Medicaid, while retaining a legacy once assets are exhausted. In our case, no one in my wife's family cares about a legacy, other than my MIL. She is under the impression that her savings still exist, which we don't correct in order to ease her mind.

The unspoken issues are the onerous charges that drain the accounts of those who saved diligently their entire lives, and the outrageous cost and restrictions of LTC insurance that cause most to avoid it. The game is rigged. My 94 year old MIL requires skilled nursing and resides in a care facility that is lower in cost than most in our area at $8,500 a month. She exhausted her substantial savings and assets, and although we offered as the last remaining relatives to have her stay at our home, we are unable to lift her and provide the care that she needs because of our age. If we opted for home care the cost is even higher, and believe me, we checked. She is now on Medicaid and has been for over a year.

The burden for the taxpayer to subsidize these costs are multiplied millions of times in similar situations across the nation. The microscope is focused on the family, and the supposed nefarious intent to pilfer assets at the expense of the taxpayer. No thought is given to the justification for the bills.

In my opinion the costs are artificially high for this service, and until they are reigned in we will all be held hostage for the care of our elderly loved ones. After all, if Medicaid will foot the bill, why make the costs more reasonable?

As for my family, my parents also lived into their 90's and stayed in their home until death, cared for by my retired sisters in a distant area of the State. The rest of us who continued to have employment responsibilities visited and helped on weekends. The challenges of this commitment cannot be overstated. It's a shame that our elderly face such financial peril, especially after being productive members who checked all the boxes and followed the rules their entire lives.
Good points. Let's fix the costs of care and not begrudge each other for who is paying a hair more or less.

FoolStreet
Posts: 425
Joined: Fri Sep 07, 2012 12:18 am

Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Fri Sep 08, 2017 12:16 am

vested1 wrote:
Thu Sep 07, 2017 10:32 am
Threads like this tend to concentrate on the ethical issues of transitioning to Medicaid, while retaining a legacy once assets are exhausted. In our case, no one in my wife's family cares about a legacy, other than my MIL. She is under the impression that her savings still exist, which we don't correct in order to ease her mind.

The unspoken issues are the onerous charges that drain the accounts of those who saved diligently their entire lives, and the outrageous cost and restrictions of LTC insurance that cause most to avoid it. The game is rigged. My 94 year old MIL requires skilled nursing and resides in a care facility that is lower in cost than most in our area at $8,500 a month. She exhausted her substantial savings and assets, and although we offered as the last remaining relatives to have her stay at our home, we are unable to lift her and provide the care that she needs because of our age. If we opted for home care the cost is even higher, and believe me, we checked. She is now on Medicaid and has been for over a year.

The burden for the taxpayer to subsidize these costs are multiplied millions of times in similar situations across the nation. The microscope is focused on the family, and the supposed nefarious intent to pilfer assets at the expense of the taxpayer. No thought is given to the justification for the bills.

In my opinion the costs are artificially high for this service, and until they are reigned in we will all be held hostage for the care of our elderly loved ones. After all, if Medicaid will foot the bill, why make the costs more reasonable?

As for my family, my parents also lived into their 90's and stayed in their home until death, cared for by my retired sisters in a distant area of the State. The rest of us who continued to have employment responsibilities visited and helped on weekends. The challenges of this commitment cannot be overstated. It's a shame that our elderly face such financial peril, especially after being productive members who checked all the boxes and followed the rules their entire lives.
Good points. Let's fix the costs of care and not begrudge each other for who is paying a hair more or less.

FoolStreet
Posts: 425
Joined: Fri Sep 07, 2012 12:18 am

Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Fri Sep 08, 2017 12:17 am

Gill wrote:
Thu Sep 07, 2017 8:03 pm
Carefreeap wrote:
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



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
I've written about it numerous times. Quite simply, if a transfer is made with a retained life estate, the asset transferred is included in the transferor's estate and receives a full step up in basis.
Gill
Thank you for clarifying.

CULater
Posts: 461
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Re: Protecting moms assets from nursing home expenses

Post by CULater » Fri Sep 08, 2017 10:30 am

In my humble opinion, the cost of long-term care is the elephant in the room that is going to bankrupt a large proportion of us all. First, there is the enormous cost of providing care for parents, who are living longer with mental impairments that require extremely expensive care. After that, you can expect to live even longer than your parents with the same sort of mental impairments that require even more expensive care. Unless you have managed to save millions in your retirement portfolio, you just aren't going to make it financially. IMO, this is being almost entirely and completely overlooked in retirement planning. I'd be worrying about that a whole lot more than about my asset allocation. Good luck to us all -- hope that your parents die soon and that you don't hang around too long either.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

NotWhoYouThink
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Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Fri Sep 08, 2017 10:43 am

CULater wrote:
Fri Sep 08, 2017 10:30 am
In my humble opinion, the cost of long-term care is the elephant in the room that is going to bankrupt a large proportion of us all. First, there is the enormous cost of providing care for parents, who are living longer with mental impairments that require extremely expensive care. After that, you can expect to live even longer than your parents with the same sort of mental impairments that require even more expensive care. Unless you have managed to save millions in your retirement portfolio, you just aren't going to make it financially. IMO, this is being almost entirely and completely overlooked in retirement planning. I'd be worrying about that a whole lot more than about my asset allocation. Good luck to us all -- hope that your parents die soon and that you don't hang around too long either.
I don't see it. For a single person, you need enough assets (including your house) to fund a couple of years in a good facility. After that, if you run out of money, Medicaid will take over. Some places will take you from day 1 on Medicaid, but you probably don't want to go to those places. But since most people don't last 2 years in a nursing home, most places will take you if you can demonstrate the ability to pay for a couple of years.

And if your life is reduced to the inside of a nursing home, who cares if your money runs out? You can't enjoy it any more anyway. Yes, you'd rather leave it as a legacy to your family than use it to pay for food and shelter and nursing care, but you spend on your needs before your wants. Just like you did the first 85 years of your life.

It will be a taxpayer burden as people continue to live longer, but there are a lot of taxpayer burdens out there.

FoolStreet
Posts: 425
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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Fri Sep 08, 2017 11:22 am

RudyS wrote:
Thu Sep 07, 2017 3:17 pm
Keep in mind, Medicaid facilities are not the same as I might choose if I had the means to pay myself. My preferred solution to this "problem" is by entering a Type A CCRC (continuing care retirement community). Once in, they assume the cost of higher level care if needed. Of course, you have to have the buy-in price and the ability to make the monthly payments, and be in good enough health to qualify for admittance..
There is a theme of using savings to pay for better care than is available from Medicare facilities. Based in experience, I don't understand. This selection process is probably the most stressful nagging issue (aside from dealing with life threatening illness).

Lets say a parent has a Fall and now cant care for him or herself in their paid off home. Or they finish cancer treatment and are too weak.

Say the kids are not not able to help Day-to-day to the level required for whatever reason.

Parent has Medicaid and a supplemental. Maybe has long term care insurance.

How do you research facilities and costs?

From my experience, searching in the San Fernando Valley in LA it was a nightmare. There wasn't necessarily beds available, or rooms had two people per room, so little privacy, or the room and board was not covered but the medical attention was.

Where is this magical facility that provides better care in the SF Valley, assuming the parent had money to pay for it? I could not find one. They were all the same. FIL didn't want to go to a nursing facility anyway, and, well, he passed under the hospital's care so it was not an issue.

I guess my point was that once a person is bedridden and needs nursing care, I am not sure there is a higher tier of service. I spent weeks looking.

JGoneRiding
Posts: 987
Joined: Tue Jul 15, 2014 3:26 pm

Re: Protecting moms assets from nursing home expenses

Post by JGoneRiding » Fri Sep 08, 2017 11:33 am

FoolStreet wrote:
Fri Sep 08, 2017 11:22 am
RudyS wrote:
Thu Sep 07, 2017 3:17 pm
Keep in mind, Medicaid facilities are not the same as I might choose if I had the means to pay myself. My preferred solution to this "problem" is by entering a Type A CCRC (continuing care retirement community). Once in, they assume the cost of higher level care if needed. Of course, you have to have the buy-in price and the ability to make the monthly payments, and be in good enough health to qualify for admittance..
There is a theme of using savings to pay for better care than is available from Medicare facilities. Based in experience, I don't understand. This selection process is probably the most stressful nagging issue (aside from dealing with life threatening illness).

Lets say a parent has a Fall and now cant care for him or herself in their paid off home. Or they finish cancer treatment and are too weak.

Say the kids are not not able to help Day-to-day to the level required for whatever reason.

Parent has Medicaid and a supplemental. Maybe has long term care insurance.

How do you research facilities and costs?

From my experience, searching in the San Fernando Valley in LA it was a nightmare. There wasn't necessarily beds available, or rooms had two people per room, so little privacy, or the room and board was not covered but the medical attention was.

Where is this magical facility that provides better care in the SF Valley, assuming the parent had money to pay for it? I could not find one. They were all the same. FIL didn't want to go to a nursing facility anyway, and, well, he passed under the hospital's care so it was not an issue.

I guess my point was that once a person is bedridden and needs nursing care, I am not sure there is a higher tier of service. I spent weeks looking.
I don't know about your area, but in Seattle area the lists may be years long to get better care. You are right if you need immediate non rehab long term care you may be in trouble. If you are getting elderly and anticipate need for retirement living that progresses to long term care then the idea is to get on a list ahead of time. This is what my grandma did while still very competent and has worked well as she aged last 10 years. That is where the ability to pay comes into play. Sudden need has and always will be a problem because sltn places want to stay full they don't "hold" empty beds

edit--private nursing level care is rare. Most rooms are 2 person. It helps with the costs we are all complaining about.

whomever
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Re: Protecting moms assets from nursing home expenses

Post by whomever » Fri Sep 08, 2017 11:41 am

FoolStreet: I think the operative phrase is 'continuing care retirement community'. The concept there is that you don't wait until something happens and the hospital is ready to discharge. When that happens, you get sent wherever there is an opening.

For a continuing care retirement community, you move there when you're still healthy. Some have detached residences that are like any other over 55 community. Some start with apartments where there isn't really any assistance. In any event, you stay in the house as long as you can, then maybe into one of the minimal assistance apartments, then into a high assistance apartment, then maybe into a hospital bed setting. It varies, of course. We had one friend who lived in one of the houses for 10 years or so, then into the hospital bed setting for a final few weeks. Another has lived in a no-assistance apartment for more than a decade, and just moved to a high-assistance apartment.

Fundamentally, though, they aren't places where you wait until you can't live alone anymore. They have advantages and disadvantages. The people we know who have used them were happy with their decision. By moving there when healthy they made new friends and so on. But they aren't for everyone, to be sure.

delamer
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Re: Protecting moms assets from nursing home expenses

Post by delamer » Fri Sep 08, 2017 11:53 am

JGoneRiding wrote:
Fri Sep 08, 2017 11:33 am
FoolStreet wrote:
Fri Sep 08, 2017 11:22 am
RudyS wrote:
Thu Sep 07, 2017 3:17 pm
Keep in mind, Medicaid facilities are not the same as I might choose if I had the means to pay myself. My preferred solution to this "problem" is by entering a Type A CCRC (continuing care retirement community). Once in, they assume the cost of higher level care if needed. Of course, you have to have the buy-in price and the ability to make the monthly payments, and be in good enough health to qualify for admittance..
There is a theme of using savings to pay for better care than is available from Medicare facilities. Based in experience, I don't understand. This selection process is probably the most stressful nagging issue (aside from dealing with life threatening illness).

Lets say a parent has a Fall and now cant care for him or herself in their paid off home. Or they finish cancer treatment and are too weak.

Say the kids are not not able to help Day-to-day to the level required for whatever reason.

Parent has Medicaid and a supplemental. Maybe has long term care insurance.

How do you research facilities and costs?

From my experience, searching in the San Fernando Valley in LA it was a nightmare. There wasn't necessarily beds available, or rooms had two people per room, so little privacy, or the room and board was not covered but the medical attention was.

Where is this magical facility that provides better care in the SF Valley, assuming the parent had money to pay for it? I could not find one. They were all the same. FIL didn't want to go to a nursing facility anyway, and, well, he passed under the hospital's care so it was not an issue.

I guess my point was that once a person is bedridden and needs nursing care, I am not sure there is a higher tier of service. I spent weeks looking.
I don't know about your area, but in Seattle area the lists may be years long to get better care. You are right if you need immediate non rehab long term care you may be in trouble. If you are getting elderly and anticipate need for retirement living that progresses to long term care then the idea is to get on a list ahead of time. This is what my grandma did while still very competent and has worked well as she aged last 10 years. That is where the ability to pay comes into play. Sudden need has and always will be a problem because sltn places want to stay full they don't "hold" empty beds

edit--private nursing level care is rare. Most rooms are 2 person. It helps with the costs we are all complaining about.
As with many other areas of life, if you need long-term care having money gives you choices that you don't have without it. Being able to afford a CCRC that allows you to age in place is better than having to wait for the next available Medicaid bed in a facility. Or being able to choose the more expensive nursing home A which is 15 minutes from your son rather than the cheaper nursing home B which is a 45 minute drive away, which makes the difference between seeing him three times a week versus once.

Planning by and for elders needs to recognize this, and not be focused on preserving assets but getting good care.

FoolStreet
Posts: 425
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Re: Protecting moms assets from nursing home expenses

Post by FoolStreet » Fri Sep 08, 2017 12:44 pm

JGoneRiding wrote:
Fri Sep 08, 2017 11:33 am
FoolStreet wrote:
Fri Sep 08, 2017 11:22 am
RudyS wrote:
Thu Sep 07, 2017 3:17 pm
Keep in mind, Medicaid facilities are not the same as I might choose if I had the means to pay myself. My preferred solution to this "problem" is by entering a Type A CCRC (continuing care retirement community). Once in, they assume the cost of higher level care if needed. Of course, you have to have the buy-in price and the ability to make the monthly payments, and be in good enough health to qualify for admittance..
There is a theme of using savings to pay for better care than is available from Medicare facilities. Based in experience, I don't understand. This selection process is probably the most stressful nagging issue (aside from dealing with life threatening illness).

Lets say a parent has a Fall and now cant care for him or herself in their paid off home. Or they finish cancer treatment and are too weak.

Say the kids are not not able to help Day-to-day to the level required for whatever reason.

Parent has Medicaid and a supplemental. Maybe has long term care insurance.

How do you research facilities and costs?

From my experience, searching in the San Fernando Valley in LA it was a nightmare. There wasn't necessarily beds available, or rooms had two people per room, so little privacy, or the room and board was not covered but the medical attention was.

Where is this magical facility that provides better care in the SF Valley, assuming the parent had money to pay for it? I could not find one. They were all the same. FIL didn't want to go to a nursing facility anyway, and, well, he passed under the hospital's care so it was not an issue.

I guess my point was that once a person is bedridden and needs nursing care, I am not sure there is a higher tier of service. I spent weeks looking.
I don't know about your area, but in Seattle area the lists may be years long to get better care. You are right if you need immediate non rehab long term care you may be in trouble. If you are getting elderly and anticipate need for retirement living that progresses to long term care then the idea is to get on a list ahead of time. This is what my grandma did while still very competent and has worked well as she aged last 10 years. That is where the ability to pay comes into play. Sudden need has and always will be a problem because sltn places want to stay full they don't "hold" empty beds

edit--private nursing level care is rare. Most rooms are 2 person. It helps with the costs we are all complaining about.
Is it easy to give me an example of the two options in Seattle, maybe URLs and general costs?

I want to try to understand this concept ahead of time in case my parents ever need it.

But most people don't want to leave their home until they absolutely must, which may be why I don't understand this "middle" area for long term care that means you aren't living at home but you are not yet bedridden in a 2 person room hospital ward?

I need to research this for the LA market.

NotWhoYouThink
Posts: 1345
Joined: Fri Dec 26, 2014 4:19 pm

Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Fri Sep 08, 2017 12:46 pm

Planning by and for elders needs to recognize this, and not be focused on preserving assets but getting good care.
Exactly.

In the OP's case, his mom is still a little young to move to a CCRC, and probably doesn't have enough money. For those of us that have the money, we hope to move to one after we're old enough, but before we are too frail. For people like OP's mom, watchful waiting for now, and maybe taking a look at investment style. Does she really have $115K in cash? Then in a decade or so the family can start looking at where she might go for assisted living if/when she can no longer stay in her house.

NotWhoYouThink
Posts: 1345
Joined: Fri Dec 26, 2014 4:19 pm

Re: Protecting moms assets from nursing home expenses

Post by NotWhoYouThink » Fri Sep 08, 2017 12:52 pm

Is it easy to give me an example of the two options in Seattle, maybe URLs and general costs?

I want to try to understand this concept ahead of time in case my parents ever need it.

But most people don't want to leave their home until they absolutely must, which may be why I don't understand this "middle" area for long term care that means you aren't living at home but you are not yet bedridden in a 2 person room hospital ward?

I need to research this for the LA market.
Google "CCRC" or "CCRC Life Care" and your city to find places near you. The move in fee will likely be the price of a house in your area. Monthly fees are higher than standard apartment rent, but lower than nursing home costs. The guarantee is that if you buy in up front, your will always pay the lower monthly fee, not the full nursing home rate, no matter how much care you need.

But there are always gotchas. Your parents may be in the CCRC apartment, but still need a part time aid. That costs extra. The monthly fee probably increases 3-5% per year. The buy in fee may or may not be fully or partially refundable when they "no longer need care."

It's not easy, but as said above more money gives more options. Giving away all your money to family and trusts limits options.

Jack FFR1846
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Re: Protecting moms assets from nursing home expenses

Post by Jack FFR1846 » Fri Sep 08, 2017 1:07 pm

Can anyone describe how medicaid facilities look? Are maintained? How the quality of life is in one? Maybe compare to a private pay facility?

I only know that when looking for facilities for a relative some years ago, we went to what were considered nicer, private pay facilities. My wife being the nurse did the pre-screening and not a single facility that accepted medicaid was included. I guess I have the impression in my head that they're on the order of an old East German prison except with worse food. Personally, I'd rather go to a nicer place and use my money to be able to do so.
Bogle: Smart Beta is stupid

SimonJester
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Re: Protecting moms assets from nursing home expenses

Post by SimonJester » Fri Sep 08, 2017 2:00 pm

Jack FFR1846 wrote:
Fri Sep 08, 2017 1:07 pm
Can anyone describe how medicaid facilities look? Are maintained? How the quality of life is in one? Maybe compare to a private pay facility?

I only know that when looking for facilities for a relative some years ago, we went to what were considered nicer, private pay facilities. My wife being the nurse did the pre-screening and not a single facility that accepted medicaid was included. I guess I have the impression in my head that they're on the order of an old East German prison except with worse food. Personally, I'd rather go to a nicer place and use my money to be able to do so.
My wife has worked as an RN in both types of facilities. She now works in the private pay type of facility with a long waiting list for patients to get in. Its a world of difference....

This is only going to get worse as more boomers end up in these facilities, but the medicaid ones are going to get stretched thinner and thinner. More patients with less staff and a bottom dollar mentality. The facilities cannot stay a float with their medicaid patients, so they will take in younger rehab patients and drop them on the already overloaded staff. Its create a dangerous situation for all involved.

My advice, keep your mother in her house a long as possible, then sell the house to pay for good quality care for the last few years.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

vested1
Posts: 1022
Joined: Wed Jan 04, 2012 4:20 pm

Re: Protecting moms assets from nursing home expenses

Post by vested1 » Fri Sep 08, 2017 7:03 pm

Jack FFR1846 wrote:
Fri Sep 08, 2017 1:07 pm
Can anyone describe how medicaid facilities look? Are maintained? How the quality of life is in one? Maybe compare to a private pay facility?

I only know that when looking for facilities for a relative some years ago, we went to what were considered nicer, private pay facilities. My wife being the nurse did the pre-screening and not a single facility that accepted medicaid was included. I guess I have the impression in my head that they're on the order of an old East German prison except with worse food. Personally, I'd rather go to a nicer place and use my money to be able to do so.
We got lucky when we needed to pick a facility. I live on the central coast of California where my MIL needed a care facility some 4 years ago. My BIL and I did the legwork, visiting and assessing the different facilities, their reputation, condition, cost, and willingness to accept Medicaid after funds ran out.

Most would not take Medicaid and said they would evict the client once funds were exhausted. Those were private pay and even though some were sub-standard in their care level or reputation/cleanliness, they were all at least $12,000 a month. Most of these required a buy-in of several hundred thousand dollars. Of the ones that accepted Medicaid, only a few would accept new Medicaid patients, and all but one offered sub-standard care and filthy conditions where I wouldn't house my dog. Those ran from around $7,500 to $10,000 a month for a shared room.

The one we finally found had a great reputation, a great staff who are always cheerful and happy. It's clean and well maintained and we have had no complaints. The cost is $8,500 a month for a two person room. She was able to pay for the 1st 3 years until her savings ran out and has transitioned the Medicaid seamlessly. I can truly say that her facility ranks right up there with the highest priced private pay facilities.

My suggestion is to check the ratings of all facilities in your area, visit them all and be prepared with a list of questions you want answered. Take notes so that they know you are paying attention. Don't assume they will transition to Medicaid. Be wary of pushy salespersons who give vague answers. Observe the atmosphere and note if other patients are calling for help with no response, or if the odor of waste is ignored. Ask about rehabilitation and exercise programs, and meal schedules. Ask to see the week's menu and if they cater to special diets if necessary. Ask about programs that offer activities, such as arts and crafts. Ask about volunteer programs with visiting lecturers or people bringing comfort pets for the patients to interact with if desired. Ask about music presentations or any other activity your loved one might be interested in. Ask if there is a resident doctor or nurse, and if not if there is a schedule for them to be on premise. Ask if they provide services like a visiting hair care specialist. We did this at every facility which enabled us to make the best choice.

I was also fortunate to have visited most of the facilities when I was younger, playing music for free with a band I was in. It's not a bad idea to do some volunteer work beforehand to get behind the scenes and find out what's really going on. There are government websites, which I don't have at my fingertips where you can look up the number, date, and type of complaints lodged against all facilities in your area.

ccieemeritus
Posts: 367
Joined: Thu Mar 06, 2014 10:43 pm

Re: Protecting moms assets from nursing home expenses

Post by ccieemeritus » Sat Sep 09, 2017 2:23 am

We used about $70k of my parents IRAs (started at $200k, not counting $250k house) to pay for long term care for Dad until he passed away. We were able to keep him in a nicer care home (than what Medicaid would have paid for had he been eligible). We paid extra to get him the room with the lounge chair and the front window.

The remaining assets look adequate to take care of Mom. In the unlikely event they run out I'll back her up.

This is the primary purpose of the assets. A possible inheritance to the grandkids is secondary.

dbr
Posts: 23720
Joined: Sun Mar 04, 2007 9:50 am

Re: Protecting moms assets from nursing home expenses

Post by dbr » Sat Sep 09, 2017 2:58 pm

My experience recently with two different people who are/have been in nursing homes is that the person in the "poverty" nursing home with the one-star rating is getting generally better care than the person in the "almost poverty" nursing home that appears to be the better home. Some of the things that have happened have been unconscionable. (It isn't my family and we are not directly involved). My point is that it is very difficult to know for sure if things are really ok in any particular facility. The person in the "worse" nursing home is actually being taken care of pretty well.

danaht
Posts: 417
Joined: Sun Oct 18, 2015 11:28 am

Re: Protecting moms assets from nursing home expenses

Post by danaht » Sat Sep 09, 2017 5:03 pm

74 is too young for a nursing home. She would be better off focusing on health (diet, and exercise) in order to get the best quality of life + being able to avoid a nursing home longer.

Minot
Posts: 407
Joined: Sat Jan 29, 2011 2:35 pm

Re: Protecting moms assets from nursing home expenses

Post by Minot » Sat Sep 09, 2017 5:09 pm

NotWhoYouThink wrote:
Fri Sep 08, 2017 12:52 pm
Is it easy to give me an example of the two options in Seattle, maybe URLs and general costs?

I want to try to understand this concept ahead of time in case my parents ever need it.

But most people don't want to leave their home until they absolutely must, which may be why I don't understand this "middle" area for long term care that means you aren't living at home but you are not yet bedridden in a 2 person room hospital ward?

I need to research this for the LA market.
Google "CCRC" or "CCRC Life Care" and your city to find places near you. The move in fee will likely be the price of a house in your area. Monthly fees are higher than standard apartment rent, but lower than nursing home costs. The guarantee is that if you buy in up front, your will always pay the lower monthly fee, not the full nursing home rate, no matter how much care you need.

But there are always gotchas. Your parents may be in the CCRC apartment, but still need a part time aid. That costs extra. The monthly fee probably increases 3-5% per year. The buy in fee may or may not be fully or partially refundable when they "no longer need care."

It's not easy, but as said above more money gives more options. Giving away all your money to family and trusts limits options.
NotWhoYouThink's response will get you information about CCRC's, but my reading of your request is that you may be wanting to learn more about what other long-term-care options there are. I'd recommend that you go to either or both of the following websites:
aplaceformom.com
senioradvisors.com
You'll need to register with either of these sites, but they have lots of information. Their free consultations really are free; ultimately, their consultants make their income from the facilities rather than the clients. A good consultant knows the market, knows what's available, and has lots of information to help you figure out your options.

You're smart to start looking into this before it's actually needed.

miamivice
Posts: 579
Joined: Tue Jun 11, 2013 11:46 am

Re: Protecting moms assets from nursing home expenses

Post by miamivice » Sat Sep 09, 2017 5:42 pm

I've posted this on threads before, but it's worth posting here.

From having a relative in a nursing home for many years due to stroke (paid for from her assets, no Medicaid involved), my family learned a few things. One of the best things about paying your own nursing home care is you can pick out whatever facility you want to stay in (or have your family member stay in), you are not limited to the exact ones that Medicaid will pay for. You can also get a private room so you are not spending your final days next to some other person who is also at the end of their live, and listening to all of the sounds that go along with one's final days. That's really a huge boon in my opinion.

The other thing is that Medicaid only pays when one's health deteriorates to a certain level (there are certain tasks that you must be unable to do on your own). Ones parent might want to go into an assisted living facility before qualifying for a Medicaid funding nursing home, and having financial resources allows for that if necessary.

I'm sure there are other reasons as well. Many people on this forum make it sound like a Medicaid paid nursing home is the same as any other home, and I don't think that's true from my perspective.

carruthers209
Posts: 32
Joined: Tue Sep 08, 2015 7:35 pm

Re: Protecting moms assets from nursing home expenses

Post by carruthers209 » Sat Sep 09, 2017 10:45 pm

Second vote for A Place for Mom. I remember seeing Joan Lunden on TV talking about what a struggle it was to find out information about assisted living/memory care for her mom. A Place for Mom was set up by Joan Lunden as a resource for families struggling to find information about living facilities. I found the website on the internet, sent in a request and have been followed up by staff who have stayed with us, called us numerous times, given us great advice about issues we're working on. These are amazing professionals who will send you their literature-I know the full cost schedules and incremental expenses, I have received numerous phone calls from different facilities inviting us for a visit. They are outstanding facilities. In their literature packets I found a copy of the physician's report that is necessary for memory care, etc. My husband's mother doesn't have a medical power of attorney (advanced care directive) so we're working with an attorney for that piece. The Place for Mom's website is excellent-all those referred sites have feedback categories. This process needs to be started sooner rather than too late. Once my mother in law has a medical crisis she may no longer be eligible for assisted living/memory care where she could be taken care of in a supportive environment. Once she has a major medical crisis, she'll probably need to go into a skilled nursing facility. Nothing about this is easy but at least I feel that I am way more knowledgeable and informed about these facilities. The "new normal" is that we're all facing cognitive decline and it's got more challenges than we knew. We almost waited too long for my mother in law to resign as grantor trustee of her portfolio which was in a trust. She couldn't even print her name-four letters. Then we found out that her IRA wasn't in the trust because legally it can't be put in a trust. The only way to access those funds are via a durable power of attorney which no one had. The attorney, just in time, determined that she had legal capacity to sign her durable power of attorney to my husband otherwise we would have had to go to court and get a conservatorship or guardianship. Very expensive and very messy. We have the gift of time right now but I don't know when that window will close.

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