Is there something you are doing to protect your assets (if you become sick or disabled)?

There are SO many stories about people who have worked hard, only to have their hard-earned money "spent down" for healthcare.

Have you learned anything from these stories? Are you doing anything different? Buying gold and silver and burying it? (haha) Giving money to charity?

I'm not saying people shouldn't pay somewhat for healthcare. I'm just wondering if anyone has had the foresight to prevent their entire life savings from dwindling away to.....nothing.

Any replies are appreciated, even links to discussions on here that I might have missed.

Thank you!

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As an attorney who has for 25 years advised people in your exact situation, I am quite sympathetic. The laws and regulations are complex and confusing, with variations from state to state. My suggestion would be to get a copy of my book, How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets and then post on this forum again with any further questions.

I notice a large number of responses here that want to castigate anyone who wishes to avail themselves of the laws and perhaps save some of their hard-earned life savings for "extras" in their old age or even to pass on to the next generation. Would they take such a harsh position were you to ask them for tax advice to save taxes? In both cases you are (i) taking advantage of clearly legal options to save money and (ii) shifting costs to other taxpayers. Of course, you are free to pay more taxes than you are legally required to do, just as you are free to pay every dime of your life savings to nursing homes when there are legal ways to protect your assets (which is the point of my book!). Only you can decide which route to follow.
Helpful Answer (4)

Wow! this took a turn real quick. I think it’s an Excellent question.
Let me share real quick. My parents worked hard from age 16 – 70. Paid their taxes and into the system. Purchased Longterm care (thank God) Put hard earned money into Their Retirement.
Their 3 kids (I’m 1 of them) also worked hard and Mom and dad “planned” to pass along their worth to the kids when they passed. They owned 2 homes outright and a fair amount of savings.
That’s 104 Years combined of hard work, Sacrifices & Savings – LET T THAT SINK IN FOR A MINUTE ! {insert Jeopardy music here}
OK – 70 yo Dad had early onset Alzheimer’s and mom left her P/T job to care for Dad. Then Mom had a stroke. I left my career up north and moved to FL to care for them both. They had the “foresight” to have a trust.
Thankfully, They had the savings and the LTC insurance that gave me the means to care for them in Their Own Home with Love and Compassion. Had they not, They would have been in the “System” for the last seven years with what I am to understand is not very compassionate care.
And IMHO and also with first hand knowledge of others , Their LIFES savings would have been exhausted in 3 years. And had they not had the trust, Those 2 homes would have been gone …. Poof !
Also in my experience and 1st hand knowledge , the “system” would have diminished not only their life expectancy, but their quality of life.
Coincidence or not, I see people in the system diminish in direct proportion to their Available funds. You make your own conclusions but that’s mine.

Nowhere in the original question did I hear about “cheating” the system. Nor did I get the impression that it was geared towards the Very Wealthy – the Multi Millionaires.
Besides, The multi millionaires most likely handle caring for their elders entirely different .

The question I heard was geared more to people in MY Situation or maybe less fortunate.

This Site is an invaluable resource for that question: As much as I don’t like attorneys, They are a necessary evil (no insult intended) to accomplish the goal of that question.
Medicaid has rules . I repeat : Medicaid has rules . And they change often. The rules are specifically designed to stop people from cheating as the 2nd poster so happily posted.
And an attorney – SPECIFICALLY an Elder Law Attorney can help navigate those rules. It’s Not Cheating if you follow the rules.

End of my story : My Parents got the best care available in Their Own Home from their own children. It was because of the Trust and the LTC that I was able to do this for them. 7 years later and the funds are almost exhausted .
Had they not had the trust, for me to draw upon the assets, they would have been in the system Sucking Up all your tax dollars with unsatisfactory care.
We [ I ] had a choice 7 years ago. I could have put them into the system and benefited from the trust which contained both their homes and a substantial amount of the retirement and savings and gone my merry way.
But I choose to care for them as they deserved and also planed for financially .
Note: They did NOT intend to burden me with caregiving. That was My Choice. Their intention was to provide the finances for me to hire out quality care.

Believe you /me…. Had they entered the system, The System would have spent far more $ on them then their assets provided back. And provide FAR FAR FAR less care . I’d hypothesize that 80% of the $ spent would have been wasted. Ya know, $25 for a band-aid , Wheel Chair invoice for $825 (I get them from amazon for 100 bucks), $2,000 for un-neccesary x-rays and God only knows how much $ for a 3 minute visit from a doctor.

So the answer to the question is really two-fold. 1) How to Protect The Assets from Medicaid 2) the intended consequences: How protecting the assets Benefits ALL. Including the tax payer .

Don’t mis-interpret my post to put down Medicaid: So many families have benefited from it. It satisfies a real need. But the system isn’t perfect by any stretch. It can be improved and I believe we are headed in that direction.
Medicaid, like so many other programs need serious reform and the WASTE is unimaginable. Please don’t pollute this thread with politics . All I’m saying is the system needs to be streamlined, simplified and more efficient.

My Suggestion to ALL… PLAN PLAN PLAN…. Currently the Medicaid lookback is 5 years . Its hard to predict what will happen in 5 years so do something NOW !
And use Credible sources to create your plan. Heard it from a friend is not Credible !

Caveat-Emptor !
Helpful Answer (17)

I've saved money for my retirement. I hope to live long enough to be able to spend it on healthcare for me and my husband.

I'm not sure what one's life savings are for, if not to spend on one's living expenses and care.

I grew up with the dictum that whatever money my parents saved was going to be spent by them, one way or the other. And that we needed to make our own way in the world and not rely on the idea of an "inheritance". While we were growing up, we watched nearby cousins become entangled in the machinations of an elderly and truly evil grandmother who sought to manipulate and control by means of threats and promises about her will. They all fell for her load of crap; when she died, there was no estate at all.

If you want your children to get ahead, give them an education and push them out of the nest.
Helpful Answer (16)

My wife went onto Medicaid in 2009 after four years of being in a private pay nursing facility. at that time the cost of a room was $4500 a month...Today the same nursing home charges $9500 a month for a room.

I have found the Medicaid program to be very generous. She pays her Social Security and nothing else for this care....Previously we had to spend down to $2000 for HER assets and a fraction but fairly substantial amount of our former assets for MINE , as the "community spouse" (meaning I was still at home in the"community.") I was able to keep one vehicle and remain in the home, as well as all my income. We did not choose to buy long term care insurance prior to my wife's stroke in 2005.

I share your concern about working, saving, and then having to spend one's assets on healthcare before Medicaid "kicks in." Yet, in our case, had it not been for Medicaid, we would have lost lost our home, all of our liquid assets, car etc., and my income in order to "try" to pay for my wife's care.

Presently Medicaid continues to pay for her care, eight full years after they commenced to pay for it...she went onto it. That means that my fellow taxpayers have ponied up the tab for her care for 96 months. At current prices, that has saved me $114,500 every year for eight full years...(I note that Medicaid does not pay nearly that amount, but had I borne the cost on my own, it would have cost me that.)

One day, when both my spouse and I have died, Medicaid will seek to take ownership of our house, so as to partially mitigate the cost of her care all these years...The house currently has a market value of around $140,000. Seems like a fair trade to me.

You may wish to consider consulting a well-recommended elder care attorney.

Grace + Peace

Helpful Answer (16)

Isn't one of the reasons you save and put away fiances for the future to pay for care that you will need.
Your kids do not want your house.
Most likely they do not want the dining set or the grandfather clock or the silver or china. They will sell the house, the dining set, clock and silver and dishes.
What they don't want is to take care of an elderly parent.
Use the money to provide yourself with good quality care, find a community that will allow you to transition from independent living to assisted to memory care if it is needed.
Do everyone a HUGE favor and draw up your papers sooner rather than later. Will, POA, Health Care POA and complete documentation as to what treatments you want and do not want. (CPR, Intubation, Feeding Tubes, can they be used temporary or long term or not at all)
Spend a bit of money pay a lawyer to draw up the paperwork, if you want use an irrevocable trust but this removes many decisions from you or at least you have to work with someone that has control over your finances.
If you are young enough now look into LTC (Long Term Care policy) This will cover a lot that your Health insurance does not cover nor Medicare.
Why would you expect the government and the taxpayers to provide for you if you have the money to care for yourself.
I would much rather have the ability to CHOOSE the type of care I get rather than having minimal care forced upon me.
Helpful Answer (14)

Thank goodness there isn't any way that one can protect their assets if they need Medicaid in the future. If Medicaid had no way to be reimbursed then it would cease to be a program.... or our taxes would skyrocket. Remember, Medicaid is funded by us, the taxpayer.

I would be quit upset if I had to pay for someone's care knowing they had multi-millions assets and found some way to hiding these assets from Medicaid.

I am so thankful that Medicaid is there to help the elders. Otherwise many adult children, even adult grandchildren, would need to quit their job to take a shift to care for an elder, thus their own savings are gone, and the circle just keeps going around and around.
Helpful Answer (12)

At 50, I've decided to stop flogging myself to earn extra money to save for the future. I worked to the exclusion of everything else in my 30s and 40s and socked away money for retirement. Life's too short. I'm going to enjoy my 50s and 60s. If I run out of money at 80 so be it. I'm not going to work myself to death in my 50s just so I can be sitting on a pile of cash at 90. Health is waaaay more important than wealth, IMO.
Helpful Answer (10)

Be thankful you have it and we're able to work for it. Enjoy the moments in life now that you can. Should you need extensive healthcare be thankful you can pay for it and not burden the next generation with your care. Also if you are able to pay for it it will probably be a greater degree of care than Mrdicaid would be able to provide if Medicaid even exist in the future!
Helpful Answer (8)

Here are a few observations about part of the asset preserving strategy that primarily involves getting Medicaid to pay for all or part of care. Save all that you want for your heirs, but remember:
1. Not all doctors take Medicaid. Not all doctors take Medicare. As both programs are reducing payments to providers, more and more doctors, therapists, etc. may opt-OUT of providing care to people on those programs. Lowest cost bidder is usually Medicaid provider in your area. My MIL is unable to find a good neurologist in her small city in Texas, and is looking at having to travel 70 miles each way to get better Parkinson's care. And the new neurologist has a 15 person waiting list - you only move up when somebody "leaves the practice" - i.e. dies or NH. Long wait with degenerative disease.
2. Your options for a Medicaid bed in a facility that you like, that "looks nice", is close to family or current neighborhood, or has openings when you need the care may be limited. Under the current proposed federal budget, there may not be Medicaid beds AT ALL in many facilities, including assisted living or other Medicaid waiver options. Make nice with your kiddos or check out your options before you need them.
3. I agree that preserving assets or making them last longer so that you have better options for care over the long term is an excellent idea. Planning to live for 20-30 years on your assets upon retirement and still be able to leave property to heirs? my lawyer's joking response to the best planning strategies to preserve assets was "don't get sick! OR die young with lots of paid-up whole life insurance OR get born to rich parents."
4. Your best resources include an elder care lawyer experienced with Medicaid in YOUR state, the documents in place like will, etc, family discussion of care needs and a real understanding of the cost of aging. But remember the analogy Mr. Heiser mentions: As with tax planning, strategies only survive the current legislative cycle as anything can change - many tax strategies didn't survive the budget reconciliations of recent years. And social security file and suspend loopholes are closed. Many of the Medicaid planning strategies will require a crystal ball or "wayback" time machine to implement 10 years in advance. Who knows what social programs will get funded in the current administration? Live cheaply, my friends.
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When my long-time friends developed dementia and memory issues, they made me their POA for their finances and health care. When they could no longer live on their own, I found a high quality, comfortable memory care apartment for them. The AL living facility told me that after 18 months of regular care payments, should my friends run out of money, they would accept whatever public financing there was. My friends had saved a lot, bought long term care insurance, had a paid up condo and IRAs. With no children and no close relatives, it was only a trusted friend they could turn to. I am learning the ropes with the long term care insurance and their investments and things have gone smoothly. We are past the 18 months now and I can see my way for payments for 2+ more years yet. Their pensions and social security have not stopped, so I take about half the monthly costs from their checking and savings and occasionally the RMD in their IRAs. Because their care costs are so high, whatever tax is withheld from the IRAs as I use them ends up being returned at tax time. My friend is also a vet and when he becomes poor enough, will be eligible for those benefits. I am also the executor of their will and so I know what to do with any left over money. I am trying to find the most charitable way to dispose of their belongings, confident they would agree to this line of thinking and I make sure not one penny ever comes to me, even for legitimate reimbursement costs--like gas mileage. I have enough income from retirement to not sweat the small stuff and I am not doing this to make money--only to serve my friends. We may never get to need medicaid or the VA benefits, but I am relieved they are there should my friend live long enough. He is physically healthy at age 91 so it could happen. I don't discuss his finances with him nor does he ever ask. I am just happy that he is happy and likes his memory care apartment and the new friends he has meals with. This shows how things could work out with planning ahead re: savings, IRAs, pensions and long term care insurance. My wife and I don't have that insurance but are now looking in to it to see if we even qualify and how much it would cost. I never realized how expensive this care is and assumed we could pay for it out of pocket with our retirement income. We might be able to pay about half at today's costs--which was a surprise to me. We would like to have an estate to pass on to our son and grandchildren to help with college costs, etc., so the LTC insurance could help make that happen, if it is not too expensive.
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