What have you learned about protecting assets?

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.

Maybe I didn't phrase my question right.

I'm not talking about millions of dollars, or cheating Medicaid. I'm talking about people who have worked hard their whole lives, paying taxes thereby funding Medicaid, only to have everything spent down.

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!

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.

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.

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

Bob

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} https://www.youtube.com/watch?v=usVaPekFpbg
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.
In other words, “HOW NOT TO FALL INTO POVERTY WHEN AN ELDER FALLS ILL”

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 !

Well, it seems to me the days of inheriting anything from our parents are gone - unless they are exceptionally wealthy. If they require public assistance, they can't have a fat account somewhere with money squirreled away. Our parents are living longer and at the rate in which they're going to be entering the "senior" demographic, there is not going to be enough public funding to carry this weight once they drain their own accounts - so if it seems bad to have to spend down to next to nothing now, I imagine it will get way worse - not sure where those dollars are going to come from...

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.

Excellent question!! A lifetime of hard earned money can disappear overnight!
I guess I feel differently than others here. I'm certainly willing to pay for my healthcare. And I don't have children, but if I did I'd want my years of work to not only go to healthcare, but also allow me to be able to leave something to help them in their future. Doing both needs planning.
If you can, spend a bit of money and get an estate lawyer to discuss your situation. You might be able to transfer ownership of your house to your children in advance, or give annual monetary gifts up to a certain amount to your children.
There is also long term care insurance, which actually is something I'm looking into now for myself. Some recommend it, others suggest putting the money you would have put towards LTC insurance premiums and put it in a separate account for future healthcare use.
Good luck!

uneekguy, THANK YOU! Your answer and information is exactly what i expected from the original post....

Current law as I understand it is that if one applies for Medicaid, then there is a five year lookback to see if any assets have been gifted to or otherwise transferred to others, family or not, as a part of qualifying....

Grace + Peace,

Bob

After dealing with my mother who was in nursing home care and watched my fathers hard earned money vanish for bills and care because he has too much to qualify for Medicaid. I am in my 50's and am going to enjoy life I have a good job but I am going to enjoy and not worry about the future if I get into my 80's and help so be it I will use Medicaid. There are so many people on Medicaid who have not worked a day in there life or very little and enjoy life to the fullest they have bills paid food on there table and health care is taken care of free of charge. So I must ask myself as I go off to work what is the point. Enjoy life and if you run out of money let Medicaid take care of you at least you work for it.

Uneekguy, just saw your post! Very well summarized!
Question: What long term insurance company did your parents use? I'm looking into it for myself.

Well, I for one never ever give anyone access to your bank account, even under pressure. Anyone who pressures you does not belong in your life nor does any business who demands access to your bank account for payment deserve your business.

Another thing you can do one protecting money is to not carry cash at all, not one cent. Keep it all in the bank and even open an able account that's newly available to people on federal benefits. Be wary though if you're on Medicaid because of something happens to you they can grab your able account funds. What you can do to stop this from happening is periodically withdraw some money to pay some bills or get a car or something those funds were intended to cover. Another smart move is to make a preneed with your favorite funeral home and instead of paying the funeral home directly in case they go under is to pay on a preneed policy to an insurance company who provides those policies but make the funeral home the owner of the policy if you're on Medicaid.

Another smart move is to cover your assets in a legal will. A POD account is another smart move but make sure whatever moves you make you have a beneficiary somewhere especially on a life insurance policy. You want to do this while your competent and don't do it if you have dementia or Alzheimer's when you're not competent to make those decisions. A POD account is another smart move but make sure whatever moves you make you have a beneficiary somewhere especially on a life insurance policy. You want to do this while your competent and don't do it if you have dementia or Alzheimer's when you're not competent to make those decisions.

Be very wary after losing a spouse. I read somewhere that vultures often read the obits to see who lost someone and who they can target for personal gain. They also tend to drive around and scan the neighborhoods looking for signs of people in need of a little extra help. It's one thing to need extra help, another for people to take advantage of you so be very careful.

Have all of your affairs in order before you actually start needing help, because you never know who your caregivers will actually be. They may appear to be one way to you, when really they are actually a totally different person.

Do background checks on any potential caregiver you may need. Get as much personal info from them as absolutely possible and find out as much as you can about them before letting them into your life. One thing I found out is someone who knew my bio dad actually had eight different cases against her from the Department of taxes. I accidentally stumbled across this on the public record for that area where my dad lived because I currently have a pending estate where I have fiduciary duties and I just so happened to have found out someone may have taken advantage of my dad.

Be very careful before you reach a stage in your life where you become vulnerable because if you don't have all of your ducks in a row before then, you're sitting duck for vultures

Everyone should be learning what to do for themselves. I've been dealing with my parents' affairs for seven years. The following is a must for them and for yourself to take the burden off your children.
Will
POA, medical and durable
Living will
Then, put property into trust. Must be done five years before any need arises. It doesn't cost that much to do.
Make a list of every asset, every asset!!!
Put your POA on every account you have including utilities. They can't even pay your light bill without a POA.
Assign your POA as POD (pay on death) on your bank accounts. If you don't, the money goes to probate and they can't pay the bills.
Put the POA on your social security as payee. This means they can monitor your Medicare and stop payments upon your death.
Make a list of all accounts and include passwords for those paid automatically. Include magazine subscriptions etc, everything that will use up funds.
Safe deposit boxes, all insurance papers, stocks, bonds, annuities. All of it.
Tell your family who is in charge and why. With their willingness to take on the duties, of course. Include any financial compensation in the conversation.
My list includes over 50 items that may apply including family pets. Start with the most crucial listed here.

Regarding LTC insurance: The claims process is elaborate and lengthy. There are lots of forms and lots of leg work to do (phone calls, dropping off forms and picking them up, etc.) You will need to have someone designated to handle the paperwork for you when the day comes that it's needed. My parents have a top notch policy they've been paying on for 18 years. It only covers 80% of the cost of the ALF room. Therefore, my parents' assets will still be drained, just a little more slowly. In the meantime I've got two friends who have placed their mothers in ALFs on Medicaid recently and report that it was a relatively easy process, and all costs are paid, no worries.

I haven't given it much though lately but I do want to buy LTC insurance in the future. I'd like to be able to leave something for my children if possible. I'm 41 now and have been busy the last few years worrying about my MIL's declining health. I don't want my children to have to quit their jobs to take care of me. I currently am not working outside the home but intend to go back into the workforce when my older child is old enough to watch my younger one when they're not in school. So hopefully I'll be able to put some money away and afford a LTC insurance policy.  As far as protecting assets, I really don't know.  Maybe an irrevocable trust?  My husband and I will probably need to make a trip to the lawyer's office in the future for that.

Mu husband's expensive care is sucking up all our savings, leaving nothing for me but Medicare. Hopefully it will still be there when I need it

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.

Many people have moral and political beliefs about asset protection, but you must do what is best for your family. As an owner of a caregiving business, I know that money is power when it comes to caregiving.
If you have substantial assets, in addition to your home, then you should consult a certified elder law attorney who knows about asset protection. It is possible to shelter your assets, but you need a knowledgeable attorney to do so. See www.nelf.org

Thank you all so much for the answers thus far, especially those that interpreted the question in the spirit in which it was intended.

There is some excellent information here! Websites I've never seen and thoughts I never would've come up with.

Again, thank you for sharing :)

I hope there is a dollar limit when it comes to how much of someone's assets can be protected. I wouldn't want to pay for a super wealthy person to be on Medicaid in a nursing home when they have millions or billions in assets. I know chances are they wouldn't take that route, but it still makes me wonder.

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.

freqflyer---Do you honestly think that there are multi-millionaires out there that are actually paying their fair share into the Medicaid system? Multi-millionaires utilize the services of financial advisors just so they can save the money they've earned & not be taxed to the hilt on all of it. One way they hide money away is to form shell corporations that hold money for them so it is not taxed at the same rate they are taxed. Real estate corporations, restaurants, "non-profits"----all of these corporations protect assets. All multi-millionaires utilize these methods & then when they require care as they get older, they don't have to go on Medicaid and can pay for their healthcare with the money that was stashed away. That is the difference between people that have money & people that don't have money---people that have to go on Medicaid usually end up in lesser quality long term care facilities, while people that have money pay for people to care for them in their home for as long as possible & then when they become too ill to stay at home, they can pay for a private room in a plush long term care facility that only accepts private pay patients. Why should the wealthy folks pay into the Medicaid system if they're never going to use it?

The "American Dream" is no longer something to strive for, because what's the sense in working hard, buying property/houses & having money/investments if the government is going to take it all away to pay for Medicaid? My advice to anybody is to utilize all of your assets to pay for care in your home---if you have money, spend it. If you have a house or houses or property, take out a reverse mortgage & use the money to pay someone to take care of you in your own home. When all of that money is tapped out, you can then apply for Medicaid & go into a nursing home. Why let the government have unencumbered assets & a home that is free & clear? Use your assets for yourself. As long as you can prove that you spent the money on yourself, you've got no problems. If you're still well enough, go on vacations, take some cruises, do some house renovations. Spend that money DOWN DOWN DOWN. Enjoy your money/assets---you worked very hard to get them!!!

I am a widow, my husband had little left when he passed from Cancer 25 years ago. I worked all my life and from day one made up an extremely strict budget from which I refused to deviate. If I had an emergency, somehow I found a way to handle it. I did'nt have the mega-salary but I did save as best I could for the future. Then my life changed when I became disabled. I had to go into assisted living because I could no longer walk. It was expensive and little by little, the money was used up. My advice to people is this: (1) save for the future and plan and budget accordingly; (2) while you still are able to do so, do all the special things you want to do. Don't plan on "tomorrow" as tomorrow may be very different. Then your conscience will be clear. Medicaid will take your funds but that is how the system is set up - to help those who can't help themselves. I hoped this clarifies a few questions.

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.

To all of you who have deeply held positions about what is right and wrong as well as paying your own way vs relying on Medicaid, I suggest that you start reading the Congressional Budget Office's anALYSES as well A Washington Post's discussion on the long-term outlook for Medicaid and Social Security. if you don't understand what you read, send me a private message and I will attempt to break it down into clearer language.
As a business owner, I see firsthand when families don't have sufficient financial resources to care for their loved ones.
Quite bitching about how wealthy people benefit from the tax laws. You can't do anything about those provisions. However, many of you can get more serious about saving for your advanced years.
I apologize in advance for offending people.

During this past year I've been seeing a talk therapist. Her clients are senior citizens only.

During one discussion we were talking about health care, and she said so many of her clients are terrified that Medicaid [not Medicare] would be cut, as her clients either have very elder parents who are residing in nursing homes using Medicaid, or her clients are seeing down the road where they don't have enough money to private pay, and what if Medicaid is reduced.

And the media isn't paying that much attention to the seniors and what would happen to them. Sadly not everyone had saved for those "rainy days".  Come on AARP, put some ads on TV as a wake-up call before it gets out of control, unless they are waiting to see what the U.S. Senate provides. 

Yes, it is a stick shock of the cost of aging here in the States. When I priced out Independent Living/Assisted Living for my Dad, and long-term care for my Mom, I was a deer in headlights.

Unless others have been in our shoes caregiving, they have zero idea what it is like and the huge cost involved.

I do hear you about there nothing being wrong with ascertaining what the law allows and doesn't allow. Health care is expensive, and long term care is quite a system (don't even get me going). And it is devastating to see one's assets being totally used right at the end of life. It seems entirely off-center to me that savers are penalized for saving. But my take on the issue is entirely different.

This country can't get itself to digest the larger issue----either we want as a society to pay for the care our elders need or we don't. You can't say out of one side of your mouth that your expenses should be shifted to taxpayers, but if someone suggests that taxes should be higher to offset that cost, they should be accused of treason. Is it okay for the rich to use tax loopholes not to pay their fair share? It might be legal, but it's not right. Frankly, I make a fairly good income and other than my mortgage interest, I have no shelters---I pay a ton in taxes.

And even more frankly, I think we should all pay more taxes so that everyone (rich and poor) has access to home-health, assisted living and nursing home care without having to go through a means-based program like Medicaid. I have spent the last eight years caring for my parents in my home, using my children and husband as care takers. And not because they didn't have means---they had plenty of money. I just didn't have the heart to place them into a care facility until I absolutely had to. I'm lucky that they can afford the care, at least for the next few years. If we are not going to swallow more taxes, I think that the Community Spouse Resource Allowance & Medicaid Estate Recovery provisions are more than a fair way for folks to keep their homes and maintain their existence during their lifetimes.