this is used to pay caregiver and mortgage.

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Thanks Lynn for getting back to me, our finacial advisor suggested the same thing. selling home and renting..however wherever I look the cost of rest is double than the monthly mortage payments around here..I'm saving up money as best as I can so that I can see an attorney..I've cut back on help in the mean time..It's difficult to discuss this with her because she tears up and gets depressed at the thought of moving from the community she so loves. It's hard to make appointments and go to them since I am here most of the time.

She was in a foster home as my aunts suggestion years was a very nice one, but her depression got so bad she wasn't eating and wouldn't let people help her, she had a bed sore that wouldn't heal till I got her home. I really don't want to go through that again.
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Shan - to tell you how to "protect" retirement funds and be ethical depends on why such protection is necessary... I believe that anything earned by an individual or a couple should be used for their long term support and quality of life. Our elders work, scrimp, save and sacrifice so they deserve to have all their money used for their care.

If you feel that state assistance (medicaide) will be necessary then speak with an elder attorney NOW to understand medicaide requirements; the sooner you do this the better. There is a look back period in each state (usually 5 -7 years) for medicaide applications. This means that if the applicant (your mom) has given away anything of value, sold something under it's value, gifted cash or made loans to anyone during that time she can be disqualified from getting any funds for a number of months. If she does get medicaide they will permit her to keep a house but they will not permit monthly payments for mortgage, utilities or insurance. If there is a spouse, the state generally permits them to live in the house and keep monthly income for their support. Sometimes if there is a family member who lives in the house, the state will not force it's immediate sale. If there is no spouse, the state will place liens on the home and will force the sale of the house upon her death or until she will no longer need state assistance. If you attempt to RENT the house then that's considered income for your mom and can really mess up the medicaide application. There's also the need to pay taxes on any rent and complete a federal and state tax return.

Often the best thing to do is understand how to reduce expenses or to understand what living options are available. Does she really need a house now? Can it be sold if rent is cheaper? Consider all the expenses involved and the cost of repairs, upkeep, mowing, utilities, insurance, etc... Do they qualify for any sort of rental assistance or rent controlled apartments based on income? How much is she spending for care giving and why?

Is it time to consider an assisted living (ALF)? You could divert the cost of care givers to pay rent at an ALF. Many facilities will accept medicaide too so your mom can stay long term even after her funds run out. Selling the house now, while she's still got funds might be a wise idea. Can she can pay rent and mortgage at the same time until it's sold? Or, consider a home equity loan to make mortgage payments until it's sold. All of this will require a lot of financial discipline - to make payments without extra expenditures but it might be best for your mom right now.

Best of luck!!
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