Who Cares What Nansi Thinks?

Over the past few weeks I've dealt with several families who are trying to "save the house" from being taken by the state.

There are a few things you should know as your parents age. Before I go into that, I'd like to give you perhaps a new way of thinking. The common phrase I hear is, "They've worked so hard all their lives just to have it all taken away by the state." The state isn't asking for something for nothing. Nursing home care is very expensive. It's hard to find good people who want to care for the elderly and to keep them requires a high wage. It's a stressful business. If you can see nursing home care as a ministry rather than a band of people trying to rob you of your inheritance, peace of mind will come to you sooner.

We live in a country where the many people believe that health care is an entitlement rather than a benefit. Those people expect the government to pay for their parents' care, while at the same time resent the fact that the government expects to either be reimbursed or provided with proof that there are no resources to pay for the care. Another mindset that should be analyzed, I suppose.

If your parents own their home and are going into a nursing home, here are some things to know: 1) The new federal "look back" period for property transfers is five years. (It used to be three). If a piece of property is given away or sold for less than fair market value, there will be a period of ineligibility for Medicaid. "Period of ineligibility" is a nice way of saying "you have to pay for it". So YOU may benefit if Dad signs his house over to you for $1, but DAD will have to cash out his CD's and stocks to pay for his care. If you want your parents' home, buy it at fair market value, OR have them sign it over to you when they are in very good health and have at least five good years left. That's a difficult prediction to make. Most of the people I encounter miss the mark.
2) When filing for Medicaid, check "yes" on the question "Do you intend to return to this property" Yes, your loved one may be on hospice, have Alzheimer's, etc and you know they won't ever go home. Checking that "yes" box protects the property from consideration and will not be counted as an asset or resource. 3) Federal law mandates vigorous estate recovery. When your loved one dies, the state will want to be reimbursed from the estate. So that protected house will have to be sold.

In order to ease the burden on the family, an aging adult should see an Elder Law attorney for estate planning. They should purchase an irrevocable burial plan. The law allows for some cash to be converted into "income producing annuities". With an annuity, it's the income that is counted as an asset rather than the whole lump some of the annuity. For example, if you have a $1,000 annuity that pays you $10 per month, the state will look at the $10 monthly income as the asset, not the $1000 annuity. (Note: There are limits to how much money you can sink into income producing annuities.)

No matter how old (or young) you are, the time is now to prepare for you old age. I cannot stress this enough. While the last year has been incredibly taxing on me, I'm grateful for the experiences I've had and the information I've absorbed.