What have you learned about protecting assets?

Candee's question is not about bilking the system, but how to prepare for whatever life is going to throw at us. It is always better to ask and be informed!!!

Just prior to my dad needing help, we got mom to an elder care attorney who set up everything - will, medical directives, moving funds to a trust, changing ownership of the condo to mom, etc. He did end up in a nursing home, which did take his pension and SS in payment, so it isn't FREE, but the prep work protected the other assets (as noted by some, there are exceptions to what Medicaid can touch, like the one car she would need and half ownership of the home - which was now actually "protected"). This was NOT in any way intended to cheat the system, but rather to protect hard-earned savings for their benefit. Had we not done this, half of everything would have been gone, whether using a private pay or Medicaid and now there would not be enough to care for her without going that Medicaid route. Six of one, half a dozen of the other!!

I only skimmed some of the responses, which seemed polarized - some think this is bilking the system, others are aware of wanting to protect assets for good reason.

Given a choice, there was no way I would have put either of our parents into a Medicaid paid nursing home. Paid by Medicaid or not (or in his case partially and his payment was HUGE because of his pension), we did not feel this was an appropriate place and don't feel that they were properly taking care of him for what they were getting paid. Many nursing homes are understaffed and underpaid, and less than desirable workers, so you are NOT necessarily getting good care for the amount you are coughing up, Medicaid or not. To be fair, there are probably some better ones out there, but personally I do not see that with nursing homes, and for-profit places are going to cut corners too, so they make their profits!

LTC is something I only recently became aware of when I was still working, but everything I've read about it, it seems like it is a huge hassle, and sometimes you do not really get all that you paid into it. Shopping around might get a "good" one, but these do need to be planned for long before they are needed.

Once we realized mom was starting down the dementia path - still functional, but definitely headed into it, we revisited the elder care attorney and "protected" HER assets. THIS has allowed us to place her in a NICE not-for-profit memory care facility and PAY for it with her assets. NO Medicaid involved. IF/WHEN she regresses to the point that we need to consider a nursing home, we will cross that bridge, but for now HER assets are taking care of her (these places generally do not use Medicaid). Given the expense now that HER assets are paying for, would we feel we were cheating the Medicaid system later should we need to go that route? Nope. They will still get her SS AND the pension (from dad), which is a good chunk of money!

There are still issues (paperwork, etc) that I am working on, but I have already decided that once I can focus on it, I plan to do the same for myself before I might become incompetent so that my kids do not have to scramble to get this set up.

IF and ONLY if there is anything left after mom passes, we would inherit anything left, but that is NOT the goal (for me anyway, cannot speak for my brothers.) Nice to inherit anything left, but with the condo and assets in a trust, it is merely protected and handled by us, but is still being held in trust for HER benefit. Had we not done this, we still could have used the money to pay for her current facility, but if she regressed too much and had to move to a nursing home, ALL of those assets would have to be used up before any Medicaid could be accessed (since dad is gone, there would be no retention of anything.)

To Candee:
If your parents are still competent, I would highly recommend you find a good elder care attorney and set this all up NOW. You need to have DPOA, and if possible get yourself as joint on their bank accounts (many people are discovering that often banks balk at the DPOA, which they should not be doing.)

If their current income cannot cover their current living expenses, the trust can be set up to provide the extra funds needed (note - we found out after the fact that the trust fund should be paying the RE taxes, condo fees, insurance directly, not through mom's account - that is being handled NOW!) If their income is sufficient, placing the trust funds with a good financial service can help "grow" those funds so that there might be enough to cover a decent facility, if and/or when that time comes.

Also, there are special forms for federal entities (SS, IRS, VA) that can/should be done while setting this all up. They do not accept DPOA (see this: https://www.agingcare.com/articles/Make-Sure-You-Are-an-Authorized-Representative-for-Your-Loved-One-202376.htm) Understandable why, but it is just another huge hurdle for us to get over, since she is not considered 'competent' at this point.

In mom's case, without considering "gains" in the trust or increases in the monthly fee, her trust can cover about 9 years, more if we get approved for VA benefit. If need be, the condo can be sold to cover more, should she continue on (she will be 94 in August)... and outlive we the kids!! :-D

So, this is an important topic and should not be summarily dismissed as cheating the system. The laws were set up to protect our seniors, so USE them.

You must plan ahead. You, yourself, are financially responsible for your own care.

I have since read a few more threads about this divisive topic. Here is something those threads got me thinking about (note my post above - we did the asset "protection" for specific reasons, NOT to cheat the system or to ensure inheritance!):

Our mother is currently in a private pay memory care facility (NOT cheap!) being funded by those assets we 'protected' in a trust fund. IF something were to happen to her requiring first hospitalization and then rehab, we would HAVE to continue making payments on her room at the AL facility in order to ensure she had a place to return to if rehab was successful...
Soooo, based on the comments saying we would be *cheating* the system, HOW I ask you all would we ever be able to pay for BOTH without help from Medicare and/or Medicaid? I also think this would apply for any married couple if one had to be placed in AL and then had an accident, temporarily putting him or her into rehab NH.

Those scenarios alone would destitute not just the one currently incapacitated but the spouse as well! Unless you are independently wealthy, it makes sense to use the LAWS set up for this to your advantage. Not everyone who uses these protections are out to cheat Medicare or Medicaid (you want to find a way to fund these, go look up the current insurance scam - for want of a better word - bilking the Medicare system of billions: search for Medicare Advantage Money Grab, three part article on publicintegrity.org This is an eye-opener! Spread the word, especially among seniors to stop them from this free useless home exam AND your congressional senators and representatives - it is noted in one of the three that congress was prepared to stop this, but was LOBBIED, backed down AND some reps are even pocketing campaign contributions from these same insurance companies!!!!)

Candee:  Set up your financial portfolio. Include in it long-term care. Yes, give to charitable oorganizations as it benefits your tax liability. Consider your RMD when you turn 70 and 1/2 years of age. Find other ways to supplemental your monthly outgoing cash, e.g. use savings apps like "Ibotta," "Walmart Savings Catcher," "BevRAGE," "Hip2Save and "AARP" for starters.

Disgustedtoo
I'm confused about your comment on paying for both hospital/rehab and ALF.
Your mom didn't give up her Medicare insurance when she went into AL? Right?? So she would still have coverage for medical bills. When she got better she would go back home to ALF. ALF is like her personal home. You have to keep paying your home expenses whether you are in the hospital or not. Right? Perhaps I misunderstood your point but I can't see how you would be paying double by continuing to pay for the Memory care/ALF that you are currently private paying for from her own funds held in trust and her insurance was paying her hospital/rehab stay. After all, she would be tying up that space while she was away just the same as if she were there. Just like an apartment or a home. Those bills go in spite of whether we are on vacation, in the hospital or visiting friends. Perhaps I misunderstood what you meant.

I was only posing scenarios that might come up. I do not profess to know a whole lot about all the ins and outs of Medicare and Medicaid, and personally hope we never NEED Medicaid, for her, me, anyone in the family! Just because it is "free" money doesn't mean you get your money's worth...

To answer your questions - No, she still has Medicare (not sure anyone CAN cancel it, except on death?), but it only covers so much. I did a look up what Medicare pays for SNF:

Your costs in Original Medicare
You pay:
Days 1–20: $0 for each benefit period.
Days 21–100: $164.50 coinsurance per day of each benefit period.
Days 101 and beyond: all costs.

For that period of Day 21 - 100 it totals $13,000!!!
THEN, after day 101, the patient pays for it all!
ALSO, this requires a minimum 3 day stay IN hospital - if not, they DO NOT PAY.

She also has another insurance policy, but typically those also only cover so much for a specific time as well, especially when they figure in Medicare co-costs. Other people might not have that secondary insurance (remember, insurance is all about PROFITs too, they will nickel and dime you whenever they can.)

As to the question about paying for your own home while away (vaca, hospital, etc), sure, one would in ALL these circumstances. However THAT home does NOT cost over $7300 per MONTH (I've read comments in these forums that talk about $12,000/month!) For the record, the trust IS ALSO paying those "home" costs, as the condo she was living in 25+ years is still under the living trust and taxes, condo fees, utilities and insurance must be paid for.

So, leaving out the condo, just consider the cost for the AL facility (7300+/m) plus the $13000 "copay" for about 3 months in the SNF, even more if the stay is longer, this is going to put a huge crimp on what those "protected assets" are going to cover for ANYONE, now and in the future That is assuming they can even afford to maintain the AL costs in addition to the SNF costs. Unprotected, you have no access to any Medicaid for X months until ALL assets are sucked dry. Then what? You get better, get out of SNF and have nothing left and nowhere to go.

My thoughts also drifted into hospice - from what I see on Medicare, they DO NOT PAY for a room/place, just pallitive care. Once whoever needs REAL nursing care, aka hospice, you would have to move to a nursing home, or go home to 24/7 care. Both of these can become very expensive over time (granted the AL costs are gone now). We do not come with expiration dates stamped on us, so that hospice could go on for a long long time. If the home is not "protected", it might be lost in the shuffle of $$$. In the end, your loved one could end up with nothing and no way to pay for the remaining care/place needed. WE are trying to preserve what she has NOW so as to ensure there might be enough left to get her the care WE deem satisfactory.