How does one protect an elderly parents assets when they go into nursing home? (1 Viewer)

[Sabertooth]

My dad is starting to get up there in years and is having some memory issues.  Physically he's in pretty darn good shape for 75 years old.  However my brothers and I are starting to come around to the fact that he could start to go downhill at some point.  

Which brings us to asset protection.  He's got good pension, 401k, VA disability, a fully paid off house, and some other assets.  

I've been hearing horror stories of basically surrendering all these assets once they go into the nursing home.  

I've never dealt with anything like this and I'm not trying to be obtuse here.  Just wondering if there are things we can do now, to make sure that he isn't liquidated to pay for elder care.  My mom died a few years ago, but only after she was bled completely dry from here unexpected cancer (she was only 64).   She passed away in the red when all was said and done.  

What are some steps we can take to protect those assets right now?  

 

[Chadstroma]

A good lawyer question that specializes in estate planning or private banking/wealth management group but generally a Living Trust is the answer to these type of questions.

 

[worrierking]

Oof, sorry to hear Saber.  These things are tough. I just went through it with my dad but he actually died a few days before he was supposed to go into a nursing home.

Laws and rules are different in different states, but for the most part, my experience was that the nursing home did not care about Dad's finances as long as the checks were coming in to pay for his care.  That would be entirely different if he was being admitted as a Medicaid patient.  Then, they would lock down their rights to every asset he might have.  It sounds like your dad has enough money to pay for his care at least for a while without getting Medicaid involved.

Does he have long-term care insurance? That's the key.  Otherwise, his assets will eventually need to be used to pay for things.

 

[whoknew]

I know a fair amount about this from my Dad going through it. 

First, there are basically three different kinds of housing - a) independent living, b) assisted living, c) memory care.

I'm not sure where your dad is on the needs spectrum, but it sounds like he may at least start out at independent living. Obviously as you go along the spectrum, more and more needs are attended to.

As for his finances, be very thankful he has a pension. These places are expensive. For his assets, you may want to get yourself or your brother as a co-signer on his accounts. Honestly the biggest concern are scam artists. They prey on the elderly. Its disgusting. Having your name on his accounts where you get notified if something out of the ordinary is happening is a good start.

As long as you are at a reputable senior living facility, I wouldn't worry about them scamming you out of money. Its expensive - but not a scam. 

 

[Christo]

With memory issues you want to talk to a lawyer about a guardianship.

 

[Steve Tasker]

Talk to an attorney

 

[Sabertooth]

Oof, sorry to hear Saber.  These things are tough. I just went through it with my dad but he actually died a few days before he was supposed to go into a nursing home.

Laws and rules are different in different states, but for the most part, my experience was that the nursing home did not care about Dad's finances as long as the checks were coming in to pay for his care.  That would be entirely different if he was being admitted as a Medicaid patient.  Then, they would lock down their rights to every asset he might have.  It sounds like your dad has enough money to pay for his care at least for a while without getting Medicaid involved.

Does he have long-term care insurance? That's the key.  Otherwise, his assets will eventually need to be used to pay for things.

I appreciate it.  And it's not really bad right now.  But I've heard that nursing homes can go back like 7 years for property transfers and what not.  It really is an area I'm completely ignorant about.  

 

[Sabertooth]

With memory issues you want to talk to a lawyer about a guardianship.

Yeah he had viral encephalitis when he was about 40 so I'm expecting that to manifest in his brain again as he ages.  

 

[Sabertooth]

I know a fair amount about this from my Dad going through it. 

First, there are basically three different kinds of housing - a) independent living, b) assisted living, c) memory care.

I'm not sure where your dad is on the needs spectrum, but it sounds like he may at least start out at independent living. Obviously as you go along the spectrum, more and more needs are attended to.

As for his finances, be very thankful he has a pension. These places are expensive. For his assets, you may want to get yourself or your brother as a co-signer on his accounts. Honestly the biggest concern are scam artists. They prey on the elderly. Its disgusting. Having your name on his accounts where you get notified if something out of the ordinary is happening is a good start.

As long as you are at a reputable senior living facility, I wouldn't worry about them scamming you out of money. Its expensive - but not a scam. 

No needs as of right now.  But in 3, 5, or 10 years who knows.  Right now he still works in his wood shop and golf almost every day.  

But that's what I mean, at $6,000+ per month or whatever, $200k is only three years.  He's not wealthy, but he is pretty well off.  

 

[worrierking]

I appreciate it.  And it's not really bad right now.  But I've heard that nursing homes can go back like 7 years for property transfers and what not.  It really is an area I'm completely ignorant about.  

They can go back multiple years for things like property transfers.  Mostly that occurs when people try to get things put into kids names so they can say to the state that the person is poor and needs Medicaid.  They are trying to dodge the responsibility of paying for nursing home care with the person's assets and getting to keep homes and money etc.  The state is all over that stuff.

Ultimately if your dad has assets, they will figure out how to use it to pay for his care.  As long as you pay for it privately they won't have any recourse to grab stuff.  When we made arrangements for my dad, as soon as they saw his long-term care policy they knew he could pay and they didn't ask anything about his home or his 401k.  

 

[Sabertooth]

Thank you for the advice.  

 

[Payne]

It's probably too late to be asking these questions.

You will have to pay for his care one way or another. Initially that will be out of pocket.

Eventually it will be Medicaid. If you go Medicaid, they will go back and look at your records. You will get penalized in time.

If they find you hid $10,000, they will penalize you enough time to cover that $10,000 before he would become eligible. 

Seek an elder law attorney.

 

[Payne]

In Michigan, you are allowed a home, a car and $2,000 in assets. Cash, Life Insurance value, etc.

My advice, get him into a home that has Medicaid beds BEFORE he goes on Medicaid. Finding a nice home that accepts Medicaid patients can be difficult.

Get him in while you are private paying. They cannot boot him even while you're applying for Medicaid.

 

[Joe Summer]

Talk to an attorney. A shady one.

 

[worrierking]

"Talk to an attorney. A shady one."

Gimme Jimmy!

 

[Mrs. Rannous]

I went through this with my mother.

MAKE SURE HE HAS A WILL.  DO IT NOW.  

Also, get a Power of Attorney, a Medical Power of Attorney, and a Living Will.  You'll be needing to have a somewhat uncomfortable discussion with him.  A lawyer will make it go a bit better.  One that specializes in Elder Care will explain everything to you and your family.

Remember, if you are paying for a nursing home, you aren't paying all of that from the 200K.  Some will be from his pension and social security.  Also, the sale of the house adds assets.   A good plan will make everyone feel more secure.  You really don't want to wait and have to go to court for guardianship.  I had to, and it is a royal PITA.

From what you say, he is in pretty good shape financially.  Having a good plan ready to go if needed will help in every way.  Good luck.

 

[Courtjester]

Mrs Rannous nails it. 

But get a consult with an attorney to get the ball rolling.

My dad died two years ago from SCLC and some of the things we went through trying to pay for his care, were terrible.

 

[Tom Servo]

Mrs Rannous nails it. 

But get a consult with an attorney to get the ball rolling.

My dad died two years ago from SCLC and some of the things we went through trying to pay for his care, were terrible.

I agree @Mrs. Rannous nails it. My wife has POA for her mom (dementia) and it's helped things out A LOT.

 

[McGarnicle]

Can you form a blind trust and "buy" the house to hide the true ownership from the state?

 

[Mrs. Rannous]

I just thought of somehting else.  If your dad has a safe deposit box, make sure you know where the key is and that you (or someone) has bank access to the box.  

Know where the will and other paperwork is located.  If you can't find it, you can't use it.

 

[Smack Tripper]

Medical power of attorney is a must. Also recommend the living will and talking through his wishes for end life care as he understands them.   That’s a very hard call to make in the dark 

 

[Mrs. Rannous]

Prepaying for a funeral is nice, too.  He can make his choices just the way he'd like them.  When my father-in-law died, my MIL didn't have to worry about that stuff.  She just called the funeral home, and they did the rest.  Much less stress at a very bad time.  All we had to do was write an obit and notify the preacher.

 

[wikkidpissah]

if the rest of the government was as effective as the forensic accountants who go over eldercare-depleted estates, America would be in damn good shape.

ETA: any old fart who trusts his kids should be maxing out gift allowances (14K annual?) to them

 

[Chadstroma]

Medical power of attorney is a must. Also recommend the living will and talking through his wishes for end life care as he understands them.   That’s a very hard call to make in the dark 

I can't stress how important this and other estate planning is. It really doesn't matter if you have money or not. The people who have taken the time to get a Trust, Will, Living Will, POA, and Medical POA make a hard time for their loved ones easier.

If you have some money and assets- then hire a professional.

If you don't- then go online and do it yourself. legalzoom or whatever.

 

[Joe Summer]

Can you form a blind trust and "buy" the house to hide the true ownership from the state?

Medicaid will look at all of your financial transactions for a 5? year period. If they see that you sold a house for $500K 2 years ago, then they'll basically bill you for the first $500K of services.

But maybe if you formed a blind trust and used it to pay for your dad's care for 5 years, and then you'd be able to salvage some of the estate? But I'm not a (shady) lawyer so I'm not sure if that would work, either.

 

[Mrs. Rannous]

My parents are 73 and 70.  They talked to a lawyer 5-7 years ago and supposedly have everything setup.  Not sure what they all did, but I think part of it is their house is in my older sister's name and their rental house is in my name.    

If you aren't sure of what they did, it's not helpful.  If you don't have a copy of a medical power of attorney, it may as well not exist.  

Do you mean you will inherit the rental house or that it is actually in your name?  That could be a problem ffor either party down the road.

 

[Chadstroma]

My parents are 73 and 70.  They talked to a lawyer 5-7 years ago and supposedly have everything setup.  Not sure what they all did, but I think part of it is their house is in my older sister's name and their rental house is in my name.    

If they have everything set up then they ought to communicate where all of the documents are. I am not sure about some of the instruments but I do know that the Trust has to be the original documents. Copies are worthless. So, it ought to be in a safe place at min a fire resistant cabinet, safe, case, or safe deposit box where you next of kin are signers or beneficiaries.

 

[Mrs. Rannous]

From what I understand it's not an inheritance thing with the houses.  At the time I think my parents did mention something about needing to be in somewhat good health for a certain number of years before it would work out.  Maybe that's the 5-7 years some in this thread are talking about?  I don't know what the rules are in my state.

That probably is the case, but if the house is in your name, you need to know about it.

 

[NutterButter]

This is my #1 reason for wanting to wander into the wilderness to spend my remaining days.  My kids now know I'm not completely joking when I mention that.

I'd think there would be some better ways to off yourself.   Dying from exposure or being eaten alive by wolves does not sound pleasant

 

[NutterButter]

Medicaid will look at all of your financial transactions for a 5? year period. If they see that you sold a house for $500K 2 years ago, then they'll basically bill you for the first $500K of services.

But maybe if you formed a blind trust and used it to pay for your dad's care for 5 years, and then you'd be able to salvage some of the estate? But I'm not a (shady) lawyer so I'm not sure if that would work, either.

If you were to pull something like that off, are you then just stuck with whatever facility medicaid decides or is it more like they write you a check and your kids can supplement that with some of those blind trust fund.?

 

[Mrs. Rannous]

Here's an explanation of the Medicaid look back period from Forbes.

 

[NutterButter]

Here's an explanation of the Medicaid look back period from Forbes.

If you gift someone 10k within that 5 year lookup back window, what's the penalty?

 

[Christo]

"Talk to an attorney. A shady one."

Gimme Jimmy!

Not a criminal attorney--a criminal attorney.

 

[Mrs. Rannous]

If you gift someone 10k within that 5 year lookup back window, what's the penalty?

I'm not sure, but it doesn't sound fun.

 

[Zegras11]

This is a long and incredibly scary story about how the elderly are swindled out of everything.

https://www.newyorker.com/magazine/2017/10/09/how-the-elderly-lose-their-rights

 

[Chadstroma]

I honestly don't know a lot about it.  My older sister works for the state in this exact field and has for a long time.  I guess she's kind of a big deal in this area of expertise.    She has the various powers of attorney for my parents.  We have discussed it in general, but I'm sure I could get more details.

From what I understand it's not an inheritance thing with the houses.  At the time I think my parents did mention something about needing to be in somewhat good health for a certain number of years before it would work out.  Maybe that's the 5-7 years some in this thread are talking about?  I don't know what the rules are in my state.

Edit:  The paperwork is in a bank safety deposit box.

As a note: POA's are invalid once the principle passes.

 

[shadrap]

Nursing home will take everything he has unless whatever he has has been transferred over 5 years ago.  Used to be three years, now it is five from when you apply for Medicaid/medicare to pay for nursing home.   He can deed the house & whatever for "love & affection" to his kids and still live there.

 

[Slider]

I've found and often heard family is the thing to be the most afraid of. Things change fast when the end comes faster than you thought.

 

[Tom Servo]

This is my #1 reason for wanting to wander into the wilderness to spend my remaining days.  My kids now know I'm not completely joking when I mention that.

My wife and I were talking yesterday and I mentioned that I don’t want to go through dementia like her mom is. I said I’d rather blow my head off. She got upset and reminded me that the husband of one of her friends did that exact thing.  

 

[Mrs. Rannous]

Nursing home will take everything he has unless whatever he has has been transferred over 5 years ago.  Used to be three years, now it is five from when you apply for Medicaid/medicare to pay for nursing home.   He can deed the house & whatever for "love & affection" to his kids and still live there.

In Texas, at least, that can be a problem.  The homestead exemption and over 65 exemption would no longer apply to property taxes.  That could cost a bundle.

 

[NutterButter]

This is a long and incredibly scary story about how the elderly are swindled out of everything.

https://www.newyorker.com/magazine/2017/10/09/how-the-elderly-lose-their-rights

Good read.   That is some scary stuff.   How do you even prevent that or plan for it?   

 

[encaitar]

Get POA now.  Look into transferring assets immediately(even if you have to pay a gift tax).  Truth is, if he has to go into a home within the next 5 years they'll take everything.  His pension/SS won't nearly cover the costs and Medicare will find everything.  

 

[flapgreen]

Get everything in your name 5 years before he may go into a nursing home and they can't take it. 

 

[flapgreen]

Get POA now.  Look into transferring assets immediately(even if you have to pay a gift tax).  Truth is, if he has to go into a home within the next 5 years they'll take everything.  His pension/SS won't nearly cover the costs and Medicare will find everything.  

Right. I've worked in nursing homes for the last 10 years and see this frequently. 

 

[Zegras11]

Good read.   That is some scary stuff.   How do you even prevent that or plan for it?   

I don't know. We just finished last week putting everything in a trust, creating a will, and leaving instructions for medical issues. I hope this all prevents that.  

 

[shadrap]

In Texas, at least, that can be a problem.  The homestead exemption and over 65 exemption would no longer apply to property taxes.  That could cost a bundle.

kudos for the "homestead exemption".

doubt many know about it.

 

[glumpy]

My dad is starting to get up there in years and is having some memory issues.  Physically he's in pretty darn good shape for 75 years old.  However my brothers and I are starting to come around to the fact that he could start to go downhill at some point.  

Which brings us to asset protection.  He's got good pension, 401k, VA disability, a fully paid off house, and some other assets.  

I've been hearing horror stories of basically surrendering all these assets once they go into the nursing home.  

I've never dealt with anything like this and I'm not trying to be obtuse here.  Just wondering if there are things we can do now, to make sure that he isn't liquidated to pay for elder care.  My mom died a few years ago, but only after she was bled completely dry from here unexpected cancer (she was only 64).   She passed away in the red when all was said and done.  

What are some steps we can take to protect those assets right now?  

Every situation is different, and the players involved account for everything...but FWIW here's what I know:

When My grandparents were in their final years my folks took care of them, their finances and everything, and the transfer of assets was fairly simple. '70's.

When my mother was in her final years my sister took care of her, her finances and everything, and the transfer of assets was fairly simple. '90's.  

So maybe I've got advanced warning. I am putting everything in my wife's name now, given the odds that she will outlast me. If nothing else there should be some tax benefits. 

 

[Mrs. Rannous]

Not much to contribute, other than overhearing at a family function my distant cousin mentioned that she was trying to be appointed a legal caretaker for a relative I've never met. Apparently in Florida, the laws are exceptionally strict due to the senior population there and how easily they've been taken advantage of in the past. She's been dealing with lawyers to the tune of $50k spent so far in the process.

Fifty K?  Wow.  I became my mother's guardain for much less than that.  Filing fees, lawyer fees, and a bond did not come to anything like that much.

Get a Power of Attorney while you can.  Really.