Geriatric financial management & asset allocations

[Brat]

I don't think this is an option for Nord's father.

[Nords]

Quote:

Originally Posted by gerntz Another aspect. I don't know how interested you are in protecting your Dad's assets long-term from nursing home payments such that Medicaid starts picking up the costs. If you are, you should get all of your Dad's assets out of his name and into the name(s) of others ASAP. I'd presume that would be in his children's names assuming they are the beneficiaries of his estate/will/trusts. Last I checked, Medicaid can "look-back" five years to see what assets were transferred out of his name. Net, if had nothing 5 years ago; i.e., in five years from now they look back to today, Medicaid then need to pick up the nursing home tab less his income - SS & pension. You could leave enough in his name such that when the LTC is gone in three years, there's enough in his name to pay the nursing home balance for 2 more years.

Quote:

Originally Posted by Brat I don't think this is an option for Nord's father.

I'm afraid Brat's point renders the rest moot.

Everything I've read about Alzheimer's so far suggests that Dad's nearing the end of mid-stage. Survival rates from that point are rarely more than five years, although it's a bell curve. The information I've read looks at the overall longevity numbers. It's hard to find a detailed website that gives families an unvarnished, even harsh indication of what timeline to expect from one point of the syndrome to the next. (Especially if there are aggravating health issues.) In the next few months I'm going to consult a local geriatric nurse for more help on that.

Dad's no longer mentally competent to manage his finances. When I'm appointed conservator, I suspect the courts would take a dim view of my gifting his assets to my brother and me (let alone other relatives). I bet Medicaid would take an even dimmer view of this financial legerdemain.

I'm not shy about exploiting every loophole of the U.S. tax code on my own returns, but I feel that Medicaid spend-down is fraught with ethics issues. While it's certainly likely to be attempted by a number of people, I don't read much about success-- and I find it morally objectionable. My Dad worked darn hard to put those assets together to support himself in a financially responsible, even comfortable, manner, and I'm not going to deliberately impoverish him in the hopes that Medicaid will step in to keep him in the style he'd want-- even when he can no longer recognize his environment.

Maybe there are good reasons to exploit the Medicaid rules, but in my father's case I think it subverts the intent of the system. If I gamed the Medicaid spend-down then I'd also have to live with myself knowing exactly what price I'd put on my morals & ethics. I'm not willing to do that either.

[gerntz]

^ To each their own WRT to Medicaid. Me, I can't see people who worked & saved being forced by the government to bankrupt themselves for their end of life care when many who made more chose to spend it and others were derelicts their entire life (Not describing those who worked hard & never made much.) & yet government provides for them free. Those types are the system gamers.

What's unethical on this issue to me is government. I have no problem legally subverting "the system". It's no different than taking advantage of every tax deduction allowed. There's nothing ethical about the system to me. It's amoral with plenty of corruption. No need to honor it.

[REWahoo]

I see good evidence here of why this country has gone to hell...

[gerntz]

^ If you think borrowing 40 cents of every dollar the Fed government spends is ethical & deserves to be honored, more power to you.

[REWahoo]

It isn't what I think of Federal govt. spending, it's what I think of me.

[Nords]

Gerntz, I'm kinda hoping to keep this thread going for a few years. You've given me your advice, I appreciate it, and I understand your perspective.

But now that we've heard each others' opinions, I'd prefer to avoid giving the moderators a reason to close this thread. I'd ask you to appreciate my perspective and take your political commentary to another thread or another forum.

[chinaco]

Quote:

Originally Posted by REWahoo I see good evidence here of why this country has gone to hell...

+1

[Nords]

More incremental progress.

Separately from my negotiations with the long-term care policy's claims processor, I've been talking to policy services about its inflation rider. My brother is sending the policy back to me in the mail so I still have to check my memory, but IIRC it was purchased in December 1992 from Time Insurance Co. Somehow over the years that policy ended up with Fortis, and then it was bought by John Hancock. So I doubt that Hancock's customer service call center has any idea what they're financially responsible for.

The policy started at $120K total coverage with a $100/day limit. The inflation rider runs for 20 years at 5%/year. When I filed the claim in April, I was told that its limits were $288K and $241/day. I can do math, too, so I was happy with that part. But then I asked whether the inflation rider continued to accrue during its 20-year lifespan or whether it was frozen when the policy began to pay out its benefits. The response was the Mainland equivalent of "Sure, brah, no problem."

I pointed out that if the rider continued to accrue during its 20-year time then the policy limit would eventually grow to $318K and $265/day. So either the initial limits I'd been quoted were not correct, or the policy indeed would be frozen when the benefits started to pay out. This time the response was "Yes, sir, we'll get back to you." That translates the same in both "Mainland" and pidgin.

Over the last three months I've had this conversation three or four times with different "policy service" staff at the call center. The answer has randomly flip-flopped each time. I'd ask for a confirmation letter and it would somehow never arrive.

Then one day Tiffany answered the phone.

If you have a policy with John Hancock and wish to speak to Tiffany, do it now because her call-center days are numbered. She answers questions when she knows the answer, she admits ignorance when applicable, she does what she says she'll do, and she even calls back to confirm that it's been satisfactorily done. She admitted ignorance on my first two queries, but she faxed me a couple of policy pages that she thought might answer my questions... and then, by gosh, she actually called me back to see if they answered my questions. On the third try my question clicked with her and she went into pit-bull mode with her chain of command.

Late Friday she faxed me a page that I don't remember seeing in Dad's policy package, but I'll have to check that again when it arrives. In part the page says "The benefit increase will occur on each eligible policy anniversary date, even if you are receiving benefits".

In other words we were both right. The policy limits are as currently stated because they only ratchet up once per year. This December (the 19th anniversary) they'll go up 5%. Dec 2012, the 20th anniversary of its 20-year term, they'll go up one final 5% and then be frozen.

Tiiffany will undoubtedly call me back on Monday to check that my question's been answered. All she has to do now is make a note of this in my record and verify that the claims processor understands it too...

Dad's care facility continues to make me happy. Dad's apartment manager wouldn't terminate the lease without a doctor's note (not just Dad's note) so that unpleasant clarification left my brother scrambling. On Thursday I sent the care facility's business manager a draft note and asked for them to put it on letterhead with a doctor's signature (as far as an apartment manager would be able to tell). They actually did that by Friday afternoon, and I've sent that over to the apartment manager. On Monday I'll verify receipt, my brother will turn over the keys, we'll get the security deposit straightened out, I'll cancel the last of the utilities & insurance, and then we can close the apartment books on this chapter of his life.

[Nords]

Busy week. Dad's still doing fine but I'm beginning to get a periscope-eye view of "caregiver stress". I'm glad he's in a group setting (where he's stimulated and happy) than living with one of his sons.

The lawyer's psychologist interviewed Dad last Monday, and part of the assessment included a form for my brother to fill out regarding his impressions of Dad's short-term and long-term memories. We should get the psychologist's report in the next week or two. Then we can move forward on the long-term care insurance claim and the guardianship/conservatorship petitions.

The apartment manager put me through 36 hours of "not returning calls" before I caught her in the office on the 6th call. She agreed that the doctor's letter was sufficient to break the lease. My brother should have mailed the keys in last week for the property manager to do the final clean & inspect and return the security deposit. I think it's $500. Note that a few 250-mile round trips between my brother's house and Dad's old apartment in a 12-year-old Ford Explorer (perhaps hauling possessions) will eat up $500 of gas fairly quickly. Good thing the apartment manager "agreed" to break the lease, because they've pissed me off enough I think I'm done sending them money. The lease only had six months left ($760/month), and they'll probably have a new tenant in the apartment this coming week. I should be paying the final utility bills this week.

When my Dad landed in the hospital in March, I had no idea how his Medigap or prescription plans worked. While I was learning about those subjects, the bills were piling up. Luckily the billers understand my ignorance and of course they don't deny care. But it took me a couple months to learn enough of the vocabulary to recognize what's important, and now I've finished notifying the last of the billers of Dad's policy numbers. I thought $3500/year was a lot of money for a Medigap policy, and maybe it was when Dad was healthy, but it's sure been worth it this year. His pension includes Medco as well, so now the new pharmacy has his blood-pressure medication back on a co-pay. Those revised bills should be settled in another week or two.

The changes of address are starting to go through, and yesterday I got four months of "do not forward" snail-mail paper statements from his bank. (Dad was signed up for online banking in March. It takes them at least that long to turn off paper statements.) Unfortunately the USPS sells changes of address to the telemarketers and direct mail people, so our junk mail is on the rise. I'm hoping that'll go away once I get Dad's name back onto the "Do not mail" lists.

My brother's still mailing the accumulated two boxes of Dad's remaining files & photos, but John Hancock (thanks, Tiffany!) sent me a full copy of the long-term care policy (I'd left Dad's copy with my brother back in March). I parsed through it just like I used to peruse nuclear reactor plant manuals to determine testing requirements.

It's clear to anyone who spends an hour or two with my Dad that he's not capable of independent living. However Hancock's policy only covers benefits for cognitive loss if the "treatment plan" includes assistance with three of the six activities of daily living (bathing, toileting, dressing, transferring, continence, & feeding). This includes definitions for three different levels of assistance.

What's frustrating about the insurance is that yes, my Dad might be capable of finding a restaurant and persuading someone to bring him a plate of food for which he'll give them a credit card or some random amount of cash. He can eat it by himself. However he's no longer capable of figuring out how to get to the restaurant (or the grocery store), determining what constitutes a healthy meal or a balanced diet, or how to make sure he pays the right amount for it. He could probably cook breakfast for himself but he might not remember where he put the food or the plates, let alone remember to turn the stove off. He can bathe and use the toilet, too, but he wouldn't remember to buy more toilet paper or even how to get to the store or how to consult a doctor if there's a troubling symptom. He can dress himself but he doesn't have the memory or problem-solving skills to do laundry, sew on a button, or buy new clothes.

I think that this description of Dad's life means that he needs assistance with bathing, toileting, dressing, and eating. Hancock would disagree, especially because the "assistance" is only supervisory ("standing by to help") or directional ("reminding or instructing") instead of hands-on. In Hancock's defense, by my definition many teenagers would also qualify for long-term care.

I suspect that insurance companies have learned over the years not to litigate to the last detail, and they have latitude in their claims approval. It probably comes down to deciding whether or not a person has sufficient short-term memory. Of course those tests range from a 10-minute cheap check by a skilled tech to an hour's assessment by a psychologist to several hours of a full-blown neurophysiological exam by a neurologist costing a few thousand bucks. But the insurance company's decision is not necessarily because they agree with the claimants-- it's because it's too expensive to keep denying claims and going through the appeals process. While they've already confirmed that Dad has only spent ~$11K for $318K of benefits, the catch is that he has to be alive to collect them. At this point my main occupation seems to be persuading John Hancock's claims processor that they've met the personification of persistence from hell.

I could say that "it's not about the money", but the money is only a proxy for the hours I've spent searching and reading and on telephone hold and talking to people who really don't want to talk to me and writing e-mails and filing paperwork. We already know the result, and we're just haggling over what date the benefits will start. Sure, that can suck, but it's far better than the alternative of having Dad move in with one of his adult children. It's taking care of family. It's fiduciary. Yet it can still suck.

I think the "root cause" of the issue is that the standard of proof is too high. By the time family can persuade a court that an adult is no longer capable of caring for themselves, that adult has either killed himself through neglect or mistake (possibly killing a few other people in the process) or has injured their health to the point where their care is much more expensive (despite the generally much shorter survival period for which they'll need care). By the time an insurance company has done enough due diligence to determine that a client is no longer capable of independent living, the client has probably delayed care for too long to help stem the decline. But again, by my definitions a number of overweight & sedentary adults (let alone the drinkers & smokers) would no longer qualify to manage their own affairs and live independently. This is hard enough when elderly parents stay in touch (let alone live) with family/friends. If you're a hermit like Dad then it's damn near impossible.

Now that I've written this post, I can see that it might be another year of this long-term care do-loop before Dad's cognition has clearly declined to the point where he needs the ADL help.

Lessons learned?
1. We don't learn. My grandfather did this same situation to Dad in the 1980s. (14 years in a care facility.) At least Dad didn't fill his spare bedroom with four years of unopened mail, although in another month or two... Yet Dad never figured out the right way for one of us sons to step in for his incapacitation. In his case, a big help would've been a POA in his "emergency" files for his checking & brokerage accounts, updated every year or two. For spouses it might be a joint checking/brokerage account or an alternate trustee's springing authority in a revocable living trust. Legal technicalities & liabilities aside, a stack of old POAs can be a big help in persuading a skeptical bank branch manager (and a notary) that you're acting in your parent's best interests.

2. I didn't know how to have the POA conversation, and all those articles in the financial media were useless at preparing me for resistance. What we see as "offering help" is perceived by the parent as "losing control". If I was restarting that POA talk of late 2009 with my father I would have said "Dad, you shouldn't hand out POA until you want to. But here's the forms from the bank & brokerage. Let's fill them out, get them notarized, and lock them away in your files. You don't have to give them to us until you feel ready, but complete them now in case you get sick and want help taking care of the bills and the apartment while you're getting better. You can take them back when you come home. I can't bring the notary to the hospital."

3. Make it easy for people to understand our benefits. I was blissfully ignorant that I was so blissfully ignorant. My father has a "If I wake up dead" letter and a DNR and a medical directive, but not a "If I'm in the ICU" letter. That letter would have said "I'm covered by Medicare (you'll need my SSN) and my Medicare co-payment is covered by my insurance (here's the name of the company and the policy number) and my prescriptions are covered by Medco (here's my number)." It also would've helped me if he'd included a "Basics of Medicare" flyer in the file, although the only part I really needed help with was the Medigap insurance.

4. If you're an adult child of an elderly parent, then you need a parent's emergency fund. Since Dad landed in the hospital on 28 Feb he's incurred expenses of over $43K for rent, utilities, insurance premiums, estimated taxes, and long-term care expenses. I was able to have him sign a few checks before he left the hospital but five months later I still do not have conservator's access to his checking or brokerage accounts. I can't touch his pension/SS deposits in his checking account. I can't rebalance his brokerage accounts, let alone raise the LTC cash he'll need ($214/day) until the insurance kicks in. Note that this does not include the $60K hospital/rehab bills (paid by Medicare & Medigap), the final legal bill for the guardianship/conservatorship petitions, and whatever medical/legal costs we'll incur to persuade John Hancock to approve the LTC claim.

[GregLee]

Quote:

Originally Posted by Nords 4. If you're an adult child of an elderly parent, then you need a parent's emergency fund.

Aside from simplifying inheritance, this is another thing in favor of joint accounts. When my mother became unable to handle finances, I could simply pay her bills by signing checks on her (and my) account. There was never an issue of giving up control, since my mother put her checking and investment accounts in my and her name back in the 80s, and I never even saw statements while she was still in charge.

[kcowan]

Yes that worked with MIL quite well but not my Dad. He refused to give up control in spite of our requests.

[Brat]

I'll tell you what happened with one of my grandmothers: she established a joint account with one of her four children. That child claimed the account in its entirety when she passed away. The bank refused to put more than two names on the account. My father did not speak to that sib for the remainder of his life, he didn't attend her funeral and he forbade me and my siblings from speaking to her family.

[meekie]

Thanks for the tips Nords. I've lost some family and friends over the past year, and am realizing what a mess it is to get stuff like that straightened out. It really is hard to get a notary to a hospital at the right time when your loved one is in and out of consciousness.
I'll be using your lessons as I get my stuff in order (hopefully sooner rather than later).

[Safe Harbour]

Great thread for anyone who is starting down this track. Things are very well covered here and your Blog is most appreciated and well written. I would add a couple of issues that did not get mentioned.

1. Nords father had no IRA but if your parent does don't forget (especially the first year) to make the RMD on time or the penalties are huge!

2. Don't let your parent continue to get mail directly in a situation with dementia. They are prone to mail fraud and will pay anything that looks like a bill.

3. Get your parent in a progressive care facility as soon as possible. They may likely require this and it is disturbing for them to be moved to a new facility because the old one can't handle them. Make sure the facility has skilled nursing as they will likely someday need it.

4. Don't plan for dementia to progress to death in 5 years. Some dementias patients go on for decades. As was said earlier Alzheimer's can only be diagnosed after death and there are many forms of dementia.

5. Make financial arrangements when your parent is still capable. For me a POA and joint accounts have worked well.

6. Getting your parents LTC to pay is only the start of the battle. It will require month by month diligence and effort to get the checks.

It's not easy getting old! But it's better than the alternative.

[Nords]

Quote:

Originally Posted by Safe Harbour Great thread for anyone who is starting down this track. Things are very well covered here and your Blog is most appreciated and well written. I would add a couple of issues that did not get mentioned.

Thanks-- I'm working on a blog post that will go up sometime in the coming months. I'll add your comments to the list!

[Brat]

I concur with Safe Harbor's points 2 & 3.

However, (there are always 'howevers') the quality of care can change over time, particularly when there is a change of managers. What is now a locally owned and managed facility can be sold to someone who doesn't have the same standards. ALWAYS review Medicare's nursing home reports of skilled nursing facilities. Don't be influenced by pretty buildings.

[MBAustin]

Excellent thread, thanks for all the updates. I hope never to be in this difficult of a situation with my mother or DH's father, but it's good to know where to find some practical "been there" information.

[chinaco]

When my mother started having problems (but was still in reasonably good health), I made an appointment with an attorney and we got her will updated, created the POAs for finance and health and living will.

So when I needed to step in and help... that was taken care of.

[chinaco]

Nords.


You did uncover a situation that many LTCi owners have not contemplated. If the health problem is related to dimentia, families may be in a waiting period before they can utilize the insurance due to how they would qualify for benefits.