What kind of an account does my husband need to set up for his Dad?

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My husband is his fathers power of attorney financial and medical. My father in law had an automobile accident for which he was given some money. My father in law had invested this money in a life insurance and will start getting a payout starting August 1 2014. My husband wants to put the money in some kind of an account so if needed the money will be there to use if his dad has to go into a nursing home at some point. What kind of an account should the money go into?

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Opening an entirely new checking account with ALL parties on the Account. Simply that.
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oops wasn't done with the post. Anyway he put the money into a life insurance and now will be getting payments on it. His wife is his primary care provider and at this point will continue to be. She will most likely take care of him until the day he dies, so he probably won't even need to go into a nursing home. He gets a good pension from is job of 40 some years he also gets his VA benefits whatever that may be. My husband has talked with her about their finances and she said they are doing fine with what they have coming in so she is still insistent that the money go to the kids. He does not have any hospital bills from the accident, or any new ones since. He already has his funeral arrangements made has since his first wife died 14 years ago. Well thanks for all the advice we are going to try to just convince her to keep the money and use it as she see fit because after all she is caring for him and does a great job at that. She loves him very much and is very devoted to him.
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My FIL accident 26 years ago was the result of a school bus going through a stop sign hitting his car on the drivers side injuring him bad. He was in intensive care for three months. He won a law suit and this is what is left to the money after he used some years back for some house remodeling.
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Lance - before anybody starts spending….couple of ?'s. The 96K came from a lawsuit, an auto accident or other tort/liability incident right? So, did Dad have any hospitalization or other medical bills due to the accident or incident that were paid by Medicare? SInce he's in his 70's, I would imagine that Medicare is his primary health insurance. Now has Medicare been reimbursed from the settlement for everything that they paid?

If not, then Dad may be get a recovery letter from Medicare. A couple of years ago the Medicare Secondary Payer Act went into law. Seems to be working it's way through the system in doing match-up's to settlements. It's likely that eventually the settlement & payment(s) to Dad will surface.

The Medicare Secondary Payer Act (MSP), is about MediCARE being reimbursed for any payments they made for medical expenses for a Medicare covered individual in which another individual, business or other entity was later found responsible for and made a financial settlement to the Medicare covered individual.
Like an auto accident settlement.

It's going to be a nightmare for self-insured's. If Medicare suspends coverage for your Dad because he did not reimburse them for costs paid, his medical costs could be private pay which will be unbelievably expensive.

Second ?, so there's 10 years between dad and wife, right? Well the probability is that Dad will need specialized caregiving in the near future. Would she become the caregiver? or will they need to hire caregivers or will he need to go into a facility? Whatever will be expensive and really even if every cent of the 96K was there, that would only pay for maybe a year of a Alz or Memory care unit @ a facility. Yeah, VA benefits can cover a portion of the NH care if Dad and wife are paying for the care on their own. VA has lots of qualifiers (including income). There was a really good article on all this on this forum by Marlo Sollitto a couple of years ago that goes into details. The article was "Veteran Financial Aid for LTC" Feb, 2010. Really find out what Dad can actually expect from VA realistically.
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It's not prudential. My FIL has a POA because after his first wife died (my husband's mom) he became very ill almost dying and so needed a POA. His health then improved, but he ended up with alcoholic brain syndrome which is like Alzheimer's. He met his now wife prior to his mind becoming so bad and they married. His mind has gotten worse. He has since been diagnosed with Alzheimer's. His now wife knows that he intended the money for his three kids and so that is what she wants to do with the money, but like stated prior we want them to use the money on stuff that needs to be done around their home. I agree the money is not much and would not go far for nursing home, besides he is a VA vet so won't really need to worry about money for a nursing home. My husband and his siblings just want them to keep the money but she argues with him about it. My FIL can't make any decisions for himself anymore. I told my husband that we just need to help his step mom and dad find things to fix around the house each month. I wish his mind was well enough to take some trips but he gets to confused making traveling difficult. He is only 72 years old his wife is 62. I guess if she keeps insisting on the kids having the money then between the three of them they will have to take turns getting a check. I told my husband that if he doesn't feel right taking the money every third month than he can give it to our kids. We have two children. I really think what it comes down to is my husband feels really bad about taking the money. He doesn't want to take money from his dad. :( It is really hard seeing your parent being lost to Alzheimer's
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If the POA became active and he was declared incompetent, he could not legally enter into a contract of marriage. See an attorney.
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Sounds like a deal with Prudential. We went through that nightmare, a year ago. They were going to pay my 90yo MIL $400.00 per month for 20 years. We had to hire an attorney to get the money in a lump sum and were only able to do that, because Prudential had misstated in a letter, that they would do that.

What does your FIL say about this? Why does he have a POA, if he has a wife? I think that i would resign as POA and let them go on as they want. $800 a month isn't very much. A nursing home would be $3,000 - $4,000 a month.
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My FIL is remarried. His wife is on his checking account. Before they got married my husband became the POA, which is still the case. The step mom keeps telling my husband that the money is the "families money" my father in law intended on this money going to his children as their inheritance, but we don't want the money we want him and her to keep the money for themselves to use as they see fit. She keeps telling my husband no it is the families money. My husband then decided that the money can go into an account for them to use to live on. She keeps arguing with my husband. So we are trying to decide how it would best be put to use. The total amount is $96,000.00 which he will get a monthly check of $786.92 until 2024.
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As Chicago states, it depends on the amount of the money. Savings accounts offer interest rates that are negligible. You could invest in mutuals, but there's the gamble that they'll decline.

The other issue is whether the payouts are taxable. I don't know that much about life insurance payouts - I only have experience with a few, one of which was one purchased for me by my parents when I was born. The dividends paid on it were taxable.

So if that's the case, you have to determine how much extra the payouts will increase any tax burden (if any) your FIL has, and factor that into consideration.
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Is your husband the only one writing checks on the account? If it is a large amount, I would see an attorney with experience in trusts. If it is a small amount, then just putting both names on the checking account, would be good.

I would take into consideration, the possibility that the dad might outlive your husband and maybe your name should be on the account, also.

Is there any possibility that your FIL would need medicaid in the next 5 years, because that makes things a lot different.

Your FIL, could pre-pay his funeral expenses. That way, the cost of a funeral does not keep going up.
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