Follow
Share

I retired two years ago and my husband is retiring this summer at age 69. It appears to me that in looking to downsize to a more appropriate home for our next phase of life, it makes more sense to buy than rent. As buying a condo or duplex would better protect assets should one of us end up in a nursing home, giving the other a home without rent. While there would still be maintenance expenses, it is making sense to me. Would the modest home have to be sold for one spouse to qualify for Medicaid should it come to that? We currently live in Ohio. Please point out the pitfalls.

This question has been closed for answers. Ask a New Question.
I think you are making the correct decision. If one spouse needs Medicaid the house will be excluded from the asset evaluation as will one car and furniture personal effects etc. if you are renting all your savings will be fair game. If you move make sure all upgrades have been made to the house and nothing expensive is hanging over you head like a new roof or furnace. keep all receipts for any work done so you can show Medicaid how the money was spent. Do not give large sums of money to family or friends within the five year look back period which of course at this stage you have no idea when that will start if ever. This would be a good time to visit an elder care lawyer for advice and get things like POA in order and healthcare proxy. Make sure there is a second person named as proxy who you trust as well as your spouse.
Helpful Answer (11)
Report

I totally agree about an Elder Care Lawyer.

If I had to move today, I would go to a Retirement Community just for the services available. Other than that, OldBob made a good comment RE: Veronica - she covered all the bases, even the "look back period" of 5 years.
Helpful Answer (3)
Report

I saw a programme on CNN several years ago - they said 5 years was cut off time period - that was when the expense of buying would be worthwhile - real estate fees, lawyers fees, land transfer tax etc was the factor that was divided by the 60 months - the interest on money paid rent but there was income tax to deal with too

Interest rates were different then so ask a financial planner/ accountant/ other professional to crunch the numbers whether rent/owning is best & how to protect your assets - if renting divide $$ in 1/2 then have in separate accounts for each of you & transfer 1/2 rent money + 1/2 other fixed expenses into your joint bill paying account monthly

You are young enough that owning might be best but that depends where you are living & what the real estate market is like there - take the time to get all your facts before you make any move & talk to professionals that will not benefit from you choice - this will cost a few dollars but could be money well spent if it saves you thousands in the long run
Helpful Answer (3)
Report

I'd say buy the new place so you'll be investing in your own place rather than paying rent to pay the investment for somebody else. You'll gain equity this way. By all means keep scrupulous records on what you spend as you will have to account for every cent should you eventually apply to Medicaid for help. Veronica is correct in that the home and one vehicle along with a few thousand dollars and personal things are exempt from the asset list. As for lawyers be careful who you pick. I went to a two hour meeting where the lawyer asked for a list of all the assets up front. Then after the speil he wanted an amount of money up front that suspiciously corresponded to the amount of cash in one listed account. Alarm bells rang and red flags were flying when that happened and turns out we left and that was the right thing to do. Hire the lawyer for an agreed amount of money to do specific things for you and go from there.
Helpful Answer (2)
Report

Pete McGill, that was a good call. We have lived in three states and had our wills and POAs updated in all three, and NONE of the attorneys asked about a list of our assets. They charged us a flat rate to update our wills, trusts and all associated documents.

On another note, RayLin Stevens mentioned moving to a retirement community. This is something we did about 8 months ago, when we moved to a NON-PROFIT CONTINUING CARE RETIREMENT COMMUNITY (CCRC). However, if and when you plan to do that, check their reputations and quality of care at both your state level and at Medicare.gov. Make sure that the care in their skilled nursing facility is top notch. You don't need problems when you reach the point of not being able to care for yourself and it's too hard to fight the system. Look at non-profits....they often have funds in case you run out of money so that you will not be forced to move out. For-profit CCRCs will ask you to move if you run out of funds, and who needs that at 95? I am 80, my husband is 75 and we are among the youngest residents here. On the other hand, they will accept new residents at age 60. It's time to consider this kind of lifestyle if you either really want it or when owning a home becomes too much for you to handle comfortably. Keep in mind that there is a sizable entrance fee and the monthly fees rise each year, but there is also a great tax break. Personally, I would not move into a retirement community that does not provide skilled nursing care (AKA a nursing home) if and when you need it. It's horrible to suddenly have a health emergency and have to find a nursing home on short notice. There are a lot of nasty nursing homes out there, and this is the MAIN reason we chose to select our final home in a CCRC with an excellent reputation for quality care. We are very happy with our choice and knowing we will have the security of good care when that time comes.

Just something to think about. Good luck finding and making the right choice for you.
Helpful Answer (2)
Report

We are now 85 and searching for independent living in a retirement community that also has assisted living and nursing care. My advice is not to wait too long. Wish we had made a move when we were younger. It takes a lot of physical energy to downsize, plus it is stressful. We did build a new home thirteen years ago and now I wish we had gone to a retirement community. I look forward to no maintenance and the choice of cooking or going to the dining room.
Helpful Answer (2)
Report

It does depend on your age and health. You may feel in great shape at 70 and develop dementia the next year, as happened to my second husband. When the spouse dies, living alone and having total responsibility for everything can be lonely and exhausting. Leaving a house in horrible condition for your heirs won't be appreciated either! This happened when my mom died; I sold at a loss to a fixer-upper company, and recently my children have had to sell my ex's house at a loss to have money to pay for his nursing home care. I live in an apartment complex that caters to seniors (although not exclusively)--no meals, but there are bridge games and a party room so it is not lonely. I hire once a month maid service and do my own shopping and cooking, but don't have to worry about repairs, etc. When I can no longer drive, I will make the switch back to a retirement community. I have owned four houses in the past and found all of them more trouble than they were worth! But we are all different.
Helpful Answer (2)
Report

Here is my opinion. First, I'm 67 and my husband is 70. We own as home. We aren't selling at this point because we can't get what it is worth. We have talked about downsizing and renting an apartment. Mainly because of upkeep and here in NJ taxes. I have been dealing with my Mom's house for two years. I wish she had gone to an apartment when my Dad died. Because of Medicaid, the house is going to be abandoned. Once I filed for Medicaid I was told to stop paying taxes. Once she is on Medicaid, there will be no money for upkeep on a house I haven't been able to sell. So, it will go for unpaid taxes or Medicaid lean because I can't afford the taxes and upkeep. So what I'm saying is renting would be my choice. If you have children, downsizing will get rid of stuff you don't need. When you reach gone, all they need to do is clean out ur rental. Nothing to sell and just have utilities shut off. I like life as simple as possible for my girls too.
Helpful Answer (2)
Report

Llamalover47, we chose to not "live in place" although our home was comfortable and accessible. However, I have worked in long term care and served as an ombudsman in LTC, and the biggest/scariest issue is that often older adults suffer a serious irreversible event such as a fall or a stroke, go to the hospital for treatment and cannot live independently after they are released. So they and their relatives/friends have to find a place for them in a very short time frame. That means, on a very practical level, that they often "settle" for a place that may not give good care because they don't have time to do enough due diligence, i.e., checking out the quality of nursing homes with available beds. So there is the risk that the elder will be placed in a facility where they may not get the quality care they need, and unfortunately, there are way too many of that type around. So they end up unbathed, or lying in their own waste because they could not get help to get to the bathroom, or they get bedsores. Some are so bad that they abuse the residents. Even in the best skilled nursing facilities, sometimes they have to wait because all the staff is busy helping others. It happens. But in the best facilities, it happens rarely, while in others who don't care about the quality of care they provide, you will find lights and bells on for most of the rooms, and residents crying or yelling for help that doesn't come. Is that the kind of place you would want your parent (or yourself) to have to live in? Old people get to the point where they are no longer able to care for themselves. That is the reality. And sometimes family can't care for the (it's a very difficult job) and sometimes they want to protect their children from having to make those difficult rushed decisions. That's why WE moved to a continuing care retirement community, with a stellar reputation for quality care, so our children would not be forced to deal with it should an emergency arise.
Helpful Answer (2)
Report

SuzyQB: Yes, I am very familiar with all of the pitfalls of aging, having just gone through it with my mother. YEARS BEFORE, we had "tried" to prepare for her eventual inability to live alone in her home  in Massachusetts. I live in Maryland and my brother in California with our families. However, she said "I'm glad I stayed in my home." Our responses of course were polar opposites since now we had to figure out a way to assist her, as her "keeping house" abilities were a bad joke. So I had to uproot my life and move there. For my husband and myself, we have thought ahead and have put in place long-term care for ourselves so that our sole heir doesn't have to go through the NIGHTMARE MY MOTHER PUT US THROUGH!
Helpful Answer (2)
Report

See All Answers
This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter