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Can an elder care trust protect a portion of these assets? Is there a formula? Most of their money is invested in IRA's and they were told that IRA money cannot be protected. If the money was invested in Non-qualified funds, they could protect some the assets. Is this true?

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Can anyone give some feedback on this?
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I am confused about your question because you didn't state his intentions for putting his assets in a trust. He can go into a nursing home as private pay and continue to hold all his assets. If he applies for Medicaid, there is a five year lookback period. I am in the process of having some things done with an elder care attorney. The laws and rule are riculously rigid and becoming stricter as far as assets are concerned. And elder care attorneys are ridiculously costly but worth it.
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First roll that IRA into a Roth IRA. Those funds are then put into a irrevocable or revocable trust (depending on preference of the Trustee/Executrix, and should not be touched by a nursing home. Your questions are somewhat vague and I cannot explain much more because you did not give much information. Is your uncle/aunt not having enough money for the nursing home and wanting to spend down to qualify for Medicaid? I don't know how to answer any more.
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I think you are asking how to protect your elders funds from a nursing home. It seems only fair that your elder pay for his/her care. Many people do protect their money so that relatives can inherit it later but is that really fair? If that money, is not spent for the care that elder then it means that we as tax payers have to foot the bill. Like janfrancisco said there is a 5 year look back, if they are already in a nursing facility it's too late.
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JoanneHarvey, I tend to agree with you when it comes to trying to protect assets for other to inherit instead of using it for one's own care. But in the situation in this question, there is a spouse involved, who may live many years longer than the uncle in a nursing home. Finding legal and legitimate ways of protecting some of the assets for the aunt seems reasonable to me.
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I wasn't aware of the spouse. In most states there is what's called a surviving spouse savings benefit, in California you are allowed to have $110,000.00 and possibly more in assets and that excludes one's residence and auto. The ill spouse has to require longterm facility care, a document from their doctor is required. This will qualify them for long-term Med-i-cal. I believe most if not all states have this option you just have to ask the local social services agency.
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Mary, that is definitely not how it worked in my state ten years ago. The amount allowed to be set aside for the spouse is determined by a formula. In our case it was $43,000. I was not able to work for 2 of the 10 years I cared for my husband at home, so as you can imagine we went through a lot of that while he was still alive. I am now a 68-year-old widow trying to figure out how to support myself for the next 20 to 30 years.

I say if gwilhe's lawyer can determine a legal way to protect assets for her aunt, more power to them all!
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There are ways to protect some of the money for the gentleman's spouse, in a way. In my folks case (here in Ohio): When Mom went into a nursing home Dad was able to keep nearly 50% of the assets (110,000.) in their case. He was also allowed to keep the house and one car. Mom's half+ of the money had to be spent down, till there was only $1500 in Mom's name. We were allowed to use her 140K to do things to benefit Mom and Dad : new glasses for Mom, hearing aids for Dad, new wheel chair for Mom, and some home improvements: new roof, kitchen floor, replaced a rotten door, repaired driveway, waterproofed part of the basement, replaced some 45 year old living room furniture. Also we were able to replace Dads old junker car with a new one. All those things were allowed to come out of Mom's portion of the money, essentially keeping the value of that money with Dad since he kept the house and the car. While all that was being done, the rest of Mom's money was paying for the NH at about $7500 per month. When she hit the $1500 mark she was able to go on Medicaid. All the spend down purchases had to documented and approved when we applied for the Medicaid. (Unnecessary luxury purchases would not have been allowed. If they had owned a boat or vacation home the value of it would have had to come out of Dad's portion, or would have had to be sold to divvy up.) By the way the "assets that had to be divvied up were their IRAs, not just the bank accounts.
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Gwhile, if your uncle or aunt are vets contact the VA. They will provide some money to pay expenses. The only other choice is taking care of them at home as long as possible (I live with my mom so she can live in her own house as long as possible.)

JoanneHarvey, I completely disagree. I gladly pay my taxes and would pay more if my mother could be taken care of without everything she and my dad worked and sacrificed for their entire lives wouldn't go to a for profit nursing home. What happens when everything is gone? They get kicked out of their care home and go to a low quality center that has to get by on the tiny amount Medicare covers. There are even people that work on commission to help you place your parent. After talking to one of these "placement counselors" my sister and I decided to take care of Mom at home as long as possible. She goes to a daycare 3 days a week and we have someone help at home when I need a break. We are lucky my dad was a WW!! vet so the VA will help pay some for home care, assisted living, or long term nursing care. Our nation could afford to provide that for everyone! Feel free to tax me more if it will help take care of all of our elderly. Call it "affordable insurance" if the word "tax" is offensive. I certainly want what I have worked for to go to my kids and not a nursing home!
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I would say protect as many assets as you can, it is a shame that your relative worked hard for what they have and want to leave some for their children but they make them spend it down to qualify for Medicare.
JoanneHarvey - I do not agree with you. We pay into, as well as your employers pay into Medicare and those who save for their future and children's future should not have to spend their life savings down to qualify for Medicare. It is wrong to penalize them just to qualify when others who spent their money instead of saving it, qualify for Medicare .
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There is a 5 year look back after everything is put into an irrevocable trust. Any adult child should understand that no one owes them an inheritence. I believe that its their money and they should use it for their own care, good care, private care, fabulously spoiled rotten care!! After all, they earned it all their life and shouldnt be put into a nursing home with 3 different nurses aides a day who have no quality time to spend with them. We used my Moms money all up for her needs over the past many years .We have my Mom with us in our home, she still gets a small SS check and we support her, shes priceless. I know in my heart, my Dad would never have wanted us to all get an inheritance and throw mom into a nursing home, she always came FIRST and whatever was left, if anything, would be inherited. If its gone, its gone, so what, let them go out in style with the best care available. Once the money is gone, then apply if you want to but for now, use it. I do not know about when a spouse is still alive but best of luck to that situation!
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I resent any implication that my mother is no getting the best "fabulously spoiled rotten care" possible, I can assure you she is! I resent any implication that I don't "understand that no one owes them an inheritance." (I corrected the spelling.) I have a good retirement income, as does my sister, and savings enough that I can enjoy my life without any inheritance. I mostly resent being told by someone in the nursing care business that I can easily pay for my mom's care by "using her retirement funds, bank accounts, and get a reverse mortgage" until she is homeless and in a state of abject poverty. This does not happen in all states or countries and should not happen anywhere. gwhile, I hope you can protect assets and get your family the care they deserve! Feel free to PM me if you want the information on the VA or other resources I have found to make my mom's life as good as possible. I will never imply you are a bad person. I use this site to get positive support, feedback, and help, not to be told how greedy and selfish I am. For the most part it has helped me keep my sanity during some very difficult times. (I think you can send private messages by giving a hug, one can never get too many hugs!)
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Apparently I hit a nerve but I hold to my beliefs. Most of us save money for " a rainy day", it would be nice if we could give some to the kids, but first and foremost your care if you need it, has to be taken into consideration. Absolutely the spouse should be protected so that they can go on and live their life. If there is any left over, great that's called inheritance. No one pays enough money into Medicare for it to pay for long term care, I'm sorry but it is true. If you want that buy Long Term Care insurance. Many people live in a nursing home for years. This is extremely expensive, if you figure all the money from a life time of contributions into Medicare it wouldn't cover you for a year in a Nursing home. I didn't mean to offend anyone, it's just the truth. Junkit I think you mean Medicade rather than medicare. It's difficult to say why people need to access Medicade but it's usually not because they didn't save their money. So many people have had terrible things happen to them during their lives, people have had their retirement stolen for no fault of their own, had terrible illness that left them unable to work, most of the coal miners in Kentucky lost all of their retirement and the list goes on. I would not be able to say they didn't save for the future or they spent their money frivolously. Our system is such that we have safety nets for people who have not been as fortunate in their life. And it is there for people who spend their money to care for themselves and then eventually have to ask the government to foot the bill.AZenhog the VA can help with some of the expenses but they don't cover everything, they have strict requirments to qualify, but I would always encourage any Vet or wife of a Vet to apply they just might qualify.
I agree with you all, I don't want my assests to go to a nursing home either BUT if I end up there I think it's my responsibily to pay for my care, just like I pay for my bills now, if I don't have that kind of money that's when I ask the govenment to help, that's what some of our taxes are going for now. Blessings
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I think Joanne's last response is right on and we should pay our fair share. Nursing homes in large part are private businesses that have those necessary bottom lines; they don't work for free. Medicare will help for short-term stays, but not long-term, permanent care. As discussed, if a spouse requires long-term nursing facility care there are Medicaid programs to help pay those costs while not taking everything from the other spouse still living in their home. If that sole spouse later requires nursing care Medicaid may put a lien, when that person has passed, on any owned property to recoup some, or when possible, all of its expenditures. But those are our tax dollars paying for such expenditures and any of us could find ourselves using that system, no matter how much we've planned and saved (unless we've bought a good long-term care insurance plan which isn't cheap). I don't mind my tax dollars or my assets helping someone out who has no other choices. A long term illness resulting in huge bills, unemployment, etc. all could wipe any of us out and we could need the help; that's the power of a social safety net and I'm glad we have such a safety net, albeit they're never perfect. I've talked to my kids about it and they totally understand there may be nothing to inherit at the end of the line and they're ok with that. I would add that if someone's loved one enters a nursing facility as a private pay patient, but will need Medicaid support later if their money runs out, get a written statement from the facility up front that when the patient is eligible, the facility will accept Medicaid (or Medi-Cal as it's called in CA.) as continuing, long-term care payment. This is an important issue to confirm as many facilities don't accept, or only like to allow a certain number of Medicaid beds at any time.
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Mom has dementia and I am one of her daughters that takes care of all her financials. we are 5 siblings two of them care for my mom in their homes. they now want to get paid for caring for my Mom because she requires more hands on. They are asking for $2,500 per month or else we would have to put her in a Nursing Home that would cost a lot more. 3 of us work and can't take care of her. So the two that care for her simply want to get paid but they also don't want to claim that in there taxes and so that means when I filed my Moms taxes I can't claim that has her expense. Is this something they can do without a problem?
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gettingold, I live with my mom and take care of her. My sister lives nearby and takes care of the finances and helps any way she can. The saddest stories and questions I read are about sibling disagreements and taking care of aging parents. I would never consider being paid to take care of Mom any more than she would expect to be paid for taking care of me growing up. Since I am living in my mom's house I even pay rent! I do keep track of out of pocket expenses and deduct them from my rent for items like her pastries, Ensure, medications, etc. I recommend talking to lawyer specializing in elder care. I don't believe family can get paid for taking care of a parent and threatening to put her in a nursing home sounds like extortion. I wish all families got along as well as mine and I hope you get some answers.
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gettingoldsucks, your sisters do need to be paid, caring for a an invalid is hard work. Some people like AZenHog have the wonderful luxury to be able to care for her mother without pay, and that's a wonderful thing. But most of us have to earn a living and if we can't work and we need to care for our parents instead, we need to be paid. They should pay their taxes and pay into Social Security, this protects them and they will need that Social Security when they get older.
You could talk to an accountant to figure out how to do that, but I would suggest following protocal because if your mom is ever audited you might be held responsible for all the money leaving her account without 1099's showing that it is going for her care.
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gettingoldsucks, absolutely the hands-on caregivers should get paid. And they should treat the payments as income. Fair is fair. It is fair for them to get paid, and it is fair for them to pay taxes on it.

AZenHog is welcome to any arrangements that work for her (his?) family, but she is wrong that family can't get paid. To say, "I can't continue to do this without getting paid. Some other arrangements, such as a nursing home, will have to be made unless I get paid," is NOT extortion. It is simply stating a fact.
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One thing I don't see addressed here is that many of us are unpaid caregivers. So mom and dad want to protect their money for children? Why not? And there should be a formula on how the assets are divided by beneficiaries at death that would be weighted in the caregivers favor. And you must also ask yourself what the mom and dad would want. The large majority would rather money go to the children rather than a facility. These parents, most of which would rather be in there homes.

Medicaid is not a bad program that has elderly in bad facilities. Many very nice facilities have a number of Medicaid beds that when a resident runs out of money, Medicaid will kick in with no change to quality of service provided.
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gladimhere, the problem with deferring "payment" until getting an inheritance is two-fold. First, it is pretty hard to predict in advance how long the caregiving will go on, and it is hard to portion out how Daughter A's inheritance should be increased, as the full-time caregiver, and Son B's should be increased as the backup. A formula sounds good, but in practice it is very hard to set up and can result in very hard feelings. Why not just pay the caregivers and helpers as you go?

And the second problem is that very, very few people who have worked for a living and who need caregiving will have ANYTHING to leave for their heirs. It is just so expensive to care for those with chronic conditions. So that means the kids who did nothing to help get nothing -- but so do the ones who sacrificed for years to care for their parents get nothing.

When there are several children and all cannot contribute to caregiving equally, it seems to me the ONLY way to ensure fairness is the pay-as-you-go principle. If there happens to be anything left, all sibs can share it equally.
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and family members can be paid for caring for parents. There needs to be a care agreement in place before payment otherwise the money will be considered a gift which requires repayment before Medicaid will kick in. The caregiver must pay taxes and social security on the money as income. This also protects their future social security benefit.
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Jeanne, I agree completely with what you are saying, as I am in the situation of being an unpaid caregiver. I first asked to have siblings portion out a larger share of the inheritance, but they didn't feel right about making the change, which I also understand. So, the I requested to be paid. That again hit a brick wall and has ended up with attorneys, court hearings, etc. One sib actually said that mom saved for her retirement, with hopes of not having to spend it so there would be inheritance left. I was absolutely appalled at that statement. Well, if subs don't want to spend mom's money for her needs then they can split the cost of my service and pay me themselves. The issue is that the noncaregiving subs think we are on vacation and this is a walk in the park.'I would never agree to pay rent either, I would be in my own home if I were not needed and wanted here by my mom. After all that is what this is about, my moms happiness and comfort in her home.
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I totally agree with Joanne and JB that assets should be used for a person's care and not "protected" so that the children can receive an inheritance. I am thankful that my parents saved throughout their lives so that I can choose the care that I feel is best for my mom and not be limited by Medicaid rules.

That being said, I don't feel that the rules are fair to spouses. Being able to keep only $110,000, or even less as in jeannegibbs' case, does not seem right after a lifetime of working and saving. The government tells us not to rely on social security alone to support us in retirement, but then forces us to do so if we are unfortunate enough to have an ill spouse who requires long-term care. Insurance can help, but most policies only cover part of the cost, and only for a limited time.
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A technicality ... Medicaid does not require anyone to pay back gifts they have been given. But the applicant who gave the money or assets away will have a penalty period imposed before being eligible for Medicaid.
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GW - trusts are totally sticky as to how they are viewed by Medicaid and within each state's viewpoint on trusts as per their law, so really you need an elder law attorney in your state to work with you in doing all this.

Junkk - I think you are confusing MediCARE (a federal entitlement) with MedicAID
(a joint federal & state benefit).

Medicare we all pay into and by & large everybody who did can enroll in medicare at 65. You determine whether or not you use it by either having it pay for your hospitalization, doc visits, med's etc. My DH now qualifies for Medicare but since he is still working and on employer insurance, he doesn't use Medicare but is enrolled in it just the same & payments to Medicare is being taken out via FICA.

It is MedicAID which is the "at-need" program that is designed to be the ultimate safety-net for those who qualify both medically and financially. It is Medicaid requires a up to 5 year look-back on the applicant's finances to make sure that they have not moved money or cashed out items in advance of the application that could have been used for their care, their property or their needs. Medicaid is a joint federal & state program BUT administered by the states so each state can put it;s own spin on qualifying. Like for JeanneGibbs, her state had a specific formula in how they qualified her late DH for community-based care and how they view the community spouse assets BUT for my mom, a widow in another state, @ a NH it is a more direct situation in that mom can have no more that # 2,094 in income / $ 2K in non-exempt assets, no property other than a homesteaded property under 500K in value; 1 car and she has to do a co-pay of ALL her monthly income to the NH except for $ 60.00 for her personal needs allowance.

The Medicaid look-back & transfer penalty & other requirements are by no means a perfect system but has to be done. If one was able to empty out their savings, or gift away their property, or cash out their investments today and apply for Medicaid tomorrow to pay for the NH or community based care, there would be no funds within Medicaid program to pay for anyone's care. Then what??

It is my experience that if they live long enough, they will eventually run out of money - unless they are generationally wealthy - and the caregivers will run out of steam or ability to meet their needs, and thank goodness there is Medicare and Medicaid for them and their families.
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Folks seemed to miss my advice so I will restate it. I recommend talking to lawyer specializing in elder care. I don't believe family can get paid for taking care of a parent and threatening to put her in a nursing home sounds like extortion. I never said they can't be paid and laws may be different from stat o state.

And thank you gladimhere for letting me know about Medicaid/Medical nursing homes. In mine and my sister's careers we have seen many nursing homes and way too many are awful. When and if the need comes we will look for the better ones.
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Very logical jeannegibbs. I agree:)
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