Paying long term care facility and protecting assets. Any suggestions?

Follow
Share

My mother may end up in a long term care facility. My mother and father currently own a home. If he sells the home and gives the money to someone else as a gift- which would be eventually used as a down payment on their home can the state seek money from the other party to pay for the care facility? My father has worked very hard for what they have and stands to loose everything to the astronomical costs of a care facility. Any suggestions? Time frames for action?

This question has been closed for answers. Ask a New Question.
Find Care & Housing
9

Answers

Show:
And the correct way to protect assets is to consult an Elder Law Attorney, to be sure it is done legally, with all the i's dotted and t's crossed.
Helpful Answer (0)
Report

Samara, welcome to the forums!

I don't think you quite understand this situation, though it is not uncommon and shows up here often. Yes, if Mother goes on Medicaid then Father needs to protect as many assets for himself as he can. He may live another 10 or 20 or 30 years in fairly good health and never need a care center himself, but he certainly will need something to live on. That is why Medicaid allows the "community" spouse to legally keep a certain level of assets and why there are other legal means of protecting some of the assets for him to use for his own living expenses and care as he ages. He is not trying to cheat the system -- he wants to maintain some of his assets for his own care, rather than just count on welfare or Medicaid in his own future.

A longterm chronic illness -- the kind that eventually may result in care center placement -- is financially devastating to both spouses. (Been there. Doing that.) It is only acting responsibly to try to minimize the devastation to the "well" spouse who will continue to live in the community.
Helpful Answer (1)
Report

Why would your father want to protect assets? For himself?
He may need Medicaid for his wife, and also himself. Why is this a problem? You work hard all youe life and try to make it last. It most likely will not last. Who can afford $90, 000 year NH? Nobody except multi-millionaire.
Assets are what you use to take care of yourself and your wife.
Helpful Answer (0)
Report

Transferring and gifting of assets is a common strategy for people so they can protect it from the asset-recovery procedure of medicaid. However, these action can be a cause for disqualification or penalty, unless it was transferred to an irrevocable trust or the money from will be use to pay for their care. It would be better to seek the help of an elder care lawyer because they are in a better position to provide you with advice on how to protect assets. If they have a long-term care insurance partnership program, they do not have to gift assets to protect it because this policy allows them to keep a portion of their assets and still qualify for medicaid, but if they don't have ltci, they may no longer qualify now and if they do, the rates of long-term care insurance will be quite expensive. You may find other options to pay for long-term care cost at ltcoptions/long-term-care-insurance-costs/, including government ltc programs.
Helpful Answer (0)
Report

Your father has worked very hard for what they have, as have the vast majority of Americans as they reach their later years. Some have more than others, but nearly all worked hard for it.

As it stands right now, in the US we are expected to use what we have to support ourselves. As we live longer and longer, and are therefore subject to more and more chronic conditions, it is very hard for most of us to have enough to continue to support ourselves and pay for our healthcare until we are 98. Many, many of us are going to run out of money before we die.

Your parents don't need a care center yet. This is a great time to consult an attorney who specializes in estate planning and/or Elder Law, and set things up so that the money will last as long as possible and that if one parent needs a care center the other will not be impoverished. Don't start giving things away without good legal guidance.
Helpful Answer (3)
Report

You live in NY, same as me. No gifting. No giving away. No life estates. Nothing is safe from Medicaid Estate Recovery Program (MERP) in NY. So if they sell the house, they put the money in the bank and spend it ONLY on their own care, no matter how generous they are feeling. Get them into a good facility that takes both private care and Medicaid. They will help you with the paperwork to make the conversion smooth. You will have a LOT more choices by going in as private pay.
Helpful Answer (2)
Report

Medicaid doesn't allow you to give your money away and then have them pay for everything. That's because Medicaid is welfare. It's not an earned benefit like Medicare. You can get around it, if you plan far enough ahead. Right now that time limit is five years, but any minute now, they might change it to seven years.

So, your choices are, to plan for old age or go on welfare when you've spent your money.
Helpful Answer (1)
Report

selling assets and gifting money can be a ground to be disqualified once she applies for medicaid, as linda stated, medicaid has a 5-year look back period. I suggest you seek the aid of an elder lawyer regarding medicaid rules, the rules varies depending on which state you are located. The government has other program that helps pay for long-term care services.
If your mom has long-term care insurance, then call the insurance company immediately, otherwise, it is too late for her to get one.
You may try other long-term care alternatives like medically written annuities or if she has life insurance, she can convert it to cover ltc expenses.
Helpful Answer (1)
Report

Get into an elder law attorney now and get advice on the rules in your state regarding Medicaid when both spouses are alive. Medicaid does a 5 year look back, looking for gifts and transfers of assets that could be used for care. They also have provisions for the other spouse and their family home. There are so many rules that the safest way is to invest in a little time with a lawyer. On time frames, I'd do it now. My mom was hale and hearty 3 years ago - things took a fast change last fall. Hugs -
Helpful Answer (1)
Report

This question has been closed for answers. Ask a New Question.