My father will soon be discharged from skilled nursing rehabilitation after having had a bad fall and a two week hospital stay. I now have power of attorney and have discovered that he is heavily indebted and, while he has assets, they are not liquid - all real estate and many are mortgaged. The skilled nursing place is giving him about 20 days total, maybe, and it's obvious he will require more care than we, his children, could ever offer at our homes. What is the best course of action? Do I or can I pay assisted living and stop paying mortgages? And what do you say to assisted living? There is no way I can make his properties liquid in two weeks. Below is a breakdown of income/assets/liabilities: Pension and Social Security income of $5,700 a month $50k of unsecured debt, likely due to dementia even pre-diagnosis. He has 6 properties: one is a half an acre that can't be built on reasonably; two downtown properties in a small southern town. Could price at $190k and he owes $70k for payoff. 3 rural properties - 48 acres paid for; 25 with barn and silo with tax value of $196k and owes $91k for payoff; another with a house and barn and two acres that he has nearly no equity in, but he is most emotionally invested in for some reason. Thanks in advance for any helpful advice.
I would go talk to a CPA asap. This is the plan I would propose: First, I would stop paying on the unsecured debt and the property with almost no equity for now - what, his credit rating would get ruined and he won't be able to get another mortgage? This is simply to afford the rent to a memory care unit.
If he gives up low equity house to forclosure, it will be ok, and "not your fault" that it's gone - you won't have put it up for sale. I'd only pay on the other mortgages maybe once every two or three mos, just enough to keep them from being foreclosed on while they are up for sale at bargain prices. Once he is settled in and there is more understanding of the finances available, then I might start paying a little on the unsecured debt because it's the right thing to do. Check with CPA before instituting this plan - it's just a bunch of ideas at this point, and I never missed a payment when we used debt!
You need to be put on all bank/broker accounts as POA - and that requires a visit in person by the account holder. When you deposit 100K in there, you want to be able to get it back out! Make sure your POA documents are registered in his home county courthouse.
It is unreasonable to expect your dad will return to farming/rural life. I understand how people get emotionally tied to land, but it will be a blessing to someone who wants to work it. Liquid assets are easier to manage than non-liquid. You can sign transfers as POA.
If something sells for a profit, I would attempt to give the unbuildable lot to the Downtown Development Authority (if it's charitable deduction) or a church or Habitat if need be - you will need to pay for an appraisal to write it off taxes to offset the profit. The charity can handle the sale or development of the property. I would not pay more property tax on the unbuildable lot but let it be foreclosed on for taxes.
Mthr had a bazillion stocks in certificate form with no basis records. Many had declared bankruptcy and were worthless - but we could not know until we investigated. She had a few properties along with financial abuse by a former coworker. It's tough to straighten out. Look out for dad's best interest with a good CPA and atty and you will be fine.
Really this is all super sticky, you or whomever is Dads' dpoa need to schedule an appt with a NAELA certified elder law atty. They will have other pros - real estate appraisers, COA's FA's, that they work with. At a minimum dad is going to have to get an appraisal done on each property to come up with a verifiable asset profile & let the atty coordinate all this.
You have basically 3 weeks to come up with options. As his rehab will be a MediCARE paid benefit and they will pay 100% for the first 3 weeks. If you can & also get family involved in this, try to get dad to do whatever rehab so that he can possible stay in rehab up to the 100 days allowed by Medicare. The remainder days are paid 80% by Medicare so dad's responsible for the 20% but if he has decent secondary health insurance they will pick up the 20%.
Again you need to do whatever to s///t///r///e///t///c///h
out dads rehab days to beyond the first 3 weeks if possible
As long as Medicare is paying, the facility will be OK. BTW Medicare pays like triple what Medicaid would pay so facility will be happy if he's Medicare. You can speak and should speak with his PT, OT to see how he is progressing in care and again do whatever to cheerlead him to stay in rehab. Comprende?
What is your sibling situation like? will everybody be on board with the plan that the NAELA atty suggests?
Does Dad possibly owe any of the kids?
BTW if dad has property that has the ability to get a HELOC, I'd try to get the max HELOC on it and asap. It will give him some immediate funds. All is going to be sold eventually for care so any more debt at this point really doesn't matter (the sale will pay off the HELOC). A lot of banks do HELOC's on-line and look to see if dad may be able to get one done like this week.
With this much in assets and convoluted property ownership, Medicaid is probably not in the picture for a long time.
Are you saying that he's just been admitted to rehab? Medicare will pay for 20 days IF he's making progress in therapy; they will pay for additional days at 80% if he continues to need therapy, up to 100 days, I believe.
It seems as though you should talk to the discharge planners at the rehab/NH about what your dad's care needs will be, going forward. Do they think he can go home with aides? Is his home "elder friendly"? Would Assisted Living be sufficient to meet his needs?
I think in your shoes, I would get dad on waiting lists for every likely AL and NH in the immediate area. Go on tours as time allows.
Hoping someone else with more financial information will be along to comment on the money end of this question.
Yes he must make progress…. that is why clearly speaking with PT, OT, Speech is mucho importante. They can kinda tell you where he is going in progress. I just wrapped 2 mos of PT and I spoke with my PT about how things run on Medicare (he has a friend @ a NH) and he told me for post-hosp NH rehab they do daily progress reports and it's all interrelated to whatever your dads ICD-10 codes are. If they actually can do electro stim, dad needs to get over not wanting "needles" or carping that its' "just acupuncture" and go with the program as that is usually a longer term sequence of sessions. You may have to convince him to do whatever in rehab. Really whatever cheerleanding chant works for him. For my mom when she had rotor cuff surgery, she had a goal of being able to "set" her hair. So find his spot that will make him participate.
Another thought, look at his taxes, they are going to tell how he structured his $ & assets. Bet you a case of Proseccco the story is all in his taxes. oh course assuming her filed!
BTW if he didn't for 2016, go right now on-line to IRS and get him to do extensions. Even if it's blind work on your part.
Your dad is in the situation in that he has had & probably still has the ability to get debt. Massive debt as they intertwine and support. Atty is going to have their hands full and they will pull in whomever else is needed. If any of these are commercial properties, you will get to know whomever is the go-to local NAIFA appraiser. Not cheap but know their market and no BS on what stuff can actually sell for. I'd be somewhat concerned that your siblings or others tell you (assuming you are the point person on all this) that XYZ is worth $$$$ or Mrs Yellowhouse sold her place for $$$$ and it starts to throw you off your game….. or gets your other family wanting to take things in another direction, which to me is to get it sold, converted or whatever to provide a solid revenue stream for the next 3 - 5 years for dad.
I know what Dads situation is…. land rich and bank poor. Those houses, parcels, etc have a value. You need to figure out if 1 of them can get him funding like now. That's why IF a HELOC could work, it would get you past the initial $ crisis. It would give dad a line of credit to supplement his SS and pension so that you have a wallet to use while the atty & you figure out what gets sold off first.
Pls. try to stay organized. I'd suggest to get color coded binders going for every property; for banking & income; for medical costs and another for existing legal. You may want to give some thought to getting a rented POBox that becomes dad's new address. UPS stores do these but what may be better is a pack & ship locally owned store (usually by college or universities) as you develop a relationship w/owners and they call you when something interesting comes in or the box is super full. Having a new address for Dad can keep you & he from commingling on mail. Which if he has lots of debt, those collectors will start hounding you at your address.
Good luck & keep your sense of humor going
How do we get him approved at memory care place under these circumstances? What do you tell them?
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