My husband is his fathers power of attorney financial and medical. My father in law had an automobile accident for which he was given some money. My father in law had invested this money in a life insurance and will start getting a payout starting August 1 2014. My husband wants to put the money in some kind of an account so if needed the money will be there to use if his dad has to go into a nursing home at some point. What kind of an account should the money go into?
If not, then Dad may be get a recovery letter from Medicare. A couple of years ago the Medicare Secondary Payer Act went into law. Seems to be working it's way through the system in doing match-up's to settlements. It's likely that eventually the settlement & payment(s) to Dad will surface.
The Medicare Secondary Payer Act (MSP), is about MediCARE being reimbursed for any payments they made for medical expenses for a Medicare covered individual in which another individual, business or other entity was later found responsible for and made a financial settlement to the Medicare covered individual.
Like an auto accident settlement.
It's going to be a nightmare for self-insured's. If Medicare suspends coverage for your Dad because he did not reimburse them for costs paid, his medical costs could be private pay which will be unbelievably expensive.
Second ?, so there's 10 years between dad and wife, right? Well the probability is that Dad will need specialized caregiving in the near future. Would she become the caregiver? or will they need to hire caregivers or will he need to go into a facility? Whatever will be expensive and really even if every cent of the 96K was there, that would only pay for maybe a year of a Alz or Memory care unit @ a facility. Yeah, VA benefits can cover a portion of the NH care if Dad and wife are paying for the care on their own. VA has lots of qualifiers (including income). There was a really good article on all this on this forum by Marlo Sollitto a couple of years ago that goes into details. The article was "Veteran Financial Aid for LTC" Feb, 2010. Really find out what Dad can actually expect from VA realistically.
What does your FIL say about this? Why does he have a POA, if he has a wife? I think that i would resign as POA and let them go on as they want. $800 a month isn't very much. A nursing home would be $3,000 - $4,000 a month.
The other issue is whether the payouts are taxable. I don't know that much about life insurance payouts - I only have experience with a few, one of which was one purchased for me by my parents when I was born. The dividends paid on it were taxable.
So if that's the case, you have to determine how much extra the payouts will increase any tax burden (if any) your FIL has, and factor that into consideration.
I would take into consideration, the possibility that the dad might outlive your husband and maybe your name should be on the account, also.
Is there any possibility that your FIL would need medicaid in the next 5 years, because that makes things a lot different.
Your FIL, could pre-pay his funeral expenses. That way, the cost of a funeral does not keep going up.