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Old 08-16-2011, 09:07 PM   #121
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Congrats on convincing your mom to put the necessary documents in place; that will pay dividends.

My sister and I are still investigating assisted living facilities, while mom gets home help. And, we're formally applying to be enrolled in the Medicaid system.
Thanks. The paper work for the other things are agreed to "in theory"l I will see what reality brings.
Good luck on your living facilities search.
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Old 08-16-2011, 09:45 PM   #122
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And, we're formally applying to be enrolled in the Medicaid system.
Just as a data point of dubious applicability, the business manager at my Dad's care facility said in passing that Medicaid approvals have taken up to six months for them.
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Old 08-19-2011, 11:21 AM   #123
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In addition to bringing in the lawyer, don't be shy about sic'ingthe state insurance department on the insurer. Most state insurance departments would be positively thrilled to hit a insurer with a big, fat consumer issue fine.
I was ready to have the lawyer and the state start the epic apocalyptic battle on Dad's behalf, but peace broke out before we had to fire a shot. The claim's been approved.

I waited (almost) patiently for three working days, and yesterday morning I called John Hancock to remind their claims processor's voicemail that I was still waiting for an update.

She called back @12:30 (6:30 PM Boston time) full of apologies. As soon as she finished expressing her regrets for her "oversight", she said the claim was approved. She said the doctor's assessment was exactly what they needed, the psychologist did a great job, absolutely no doubt. She said the contrast between the care facility's MDS/MMSE and the psychologist's report was so stark that it was like reading about two different people. I'm going to tug on that thread with the care facility.

The approval is retroactive to the expiration of the 100-day exclusion period (15 July). Hancock's confirmation letter is on the way. Today I'll fax the bills for July (16-31) and August for Dad's full reimbursement of 47 days (x $214/day = $10K).

September's payment (and subsequent months) from Hancock will be assigned directly to the care facility. The policy's 5%/year inflation rider continues to accrue through the end of 2012 (I have that in writing now too). The daily dollar limit this year is $240/day, in 2012 it's $253/day, and starting in 2013 the policy tops out at $265/day. The policy total limit is $288K now and will top out in 2013 at $318K.

Even if the care facility boosted their $214/day rate to the policy limits tomorrow, it's still enough coverage for 3.5 years. The facility's business manager projects 2% inflation, and without plugging anything into a spreadsheet I think that still means the policy will last about 4.5 years.

Dad's pension & Social Security are just under $3500/month, and that amount will probably stay flat or drop slightly (as Medicare premiums rise). Still, every year that LTC is paying his bills adds another $42K of income to his assets. His Medigap insurance is about $300/month. His pension's prescription plan(!) has a copay of about $20/month. His only other "expenses" are haircuts, snacks, SUV insurance, and state/federal taxes.

Each year of pension/SS income now (before the policy runs out) will someday pay for another five months of long-term care (after the policy runs out). That'd be a total of about 1.5-2 years. At that point he'll start spending down his savings. I'm sorry to say that I don't think he'll outlive his assets.

A couple months ago Dad agreed to sell off two of his mutual funds with high expense ratios (Fidelity Magellan and "International Value") and half the shares of his only remaining individual stock. The cap losses on the funds were offset by the gains on the stock. The dividends & cap gains on his other mutual funds are being paid out in cash, not reinvested. He's about 70/15/15 stock/bonds/cash now (down from 85/15) but the cash will be rising over the next three years. Over the next few years we'll keep selling the rest of the stock and most of the equity mutual funds in a tax-efficient manner, but with the pension income he'll have enough cash for several years of expenses.

The worst financial surprise I can see would be if Dad had a medical crisis or an accident that hospitalized him (on Medicare). He'd eventually return to the care facility to resume his residency (with some weeks of rehab paid by Medicare). That would re-trigger John Hancock's 100-day exclusion and cost Dad a couple months out of pocket. However the policy would just be suspended and would restart after the 100 days. But Dad's physical health is OK now.

I'll have to spreadsheet all of this out over the next week or two, but I think his assets are going into autopilot (with annual tax-efficient equity sales) until 2014.

Next target: the lawyer's petitions for guardianship/conservatorship. She's supposed to be filing next week and we hope the hearing's before the end of Sep.

Dad broke his apartment lease at the end of July, but the property manager has been reeeeeal slow to tell us what's happening with Dad's security deposit. I'll sort that out next week. One more small gas/electric bill to come, and then that's all done too.
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Old 08-19-2011, 11:37 AM   #124
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I was ready to have the lawyer and the state start the epic apocalyptic battle on Dad's behalf, but peace broke out before we had to fire a shot. The claim's been approved.

I waited (almost) patiently for three working days, and yesterday morning I called John Hancock to remind their claims processor's voicemail that I was still waiting for an update.

She called back @12:30 (6:30 PM Boston time) full of apologies. As soon as she finished expressing her regrets for her "oversight", she said the claim was approved. She said the doctor's assessment was exactly what they needed, the psychologist did a great job, absolutely no doubt. She said the contrast between the care facility's MDS/MMSE and the psychologist's report was so stark that it was like reading about two different people. I'm going to tug on that thread with the care facility.

The approval is retroactive to the expiration of the 100-day exclusion period (15 July). Hancock's confirmation letter is on the way. Today I'll fax the bills for July (16-31) and August for Dad's full reimbursement of 47 days (x $214/day = $10K).

September's payment (and subsequent months) from Hancock will be assigned directly to the care facility. The policy's 5%/year inflation rider continues to accrue through the end of 2012 (I have that in writing now too). The daily dollar limit this year is $240/day, in 2012 it's $253/day, and starting in 2013 the policy tops out at $265/day. The policy total limit is $288K now and will top out in 2013 at $318K.

Even if the care facility boosted their $214/day rate to the policy limits tomorrow, it's still enough coverage for 3.5 years. The facility's business manager projects 2% inflation, and without plugging anything into a spreadsheet I think that still means the policy will last about 4.5 years.

Dad's pension & Social Security are just under $3500/month, and that amount will probably stay flat or drop slightly (as Medicare premiums rise). Still, every year that LTC is paying his bills adds another $42K of income to his assets. His Medigap insurance is about $300/month. His pension's prescription plan(!) has a copay of about $20/month. His only other "expenses" are haircuts, snacks, SUV insurance, and state/federal taxes.

Each year of pension/SS income now (before the policy runs out) will someday pay for another five months of long-term care (after the policy runs out). That'd be a total of about 1.5-2 years. At that point he'll start spending down his savings. I'm sorry to say that I don't think he'll outlive his assets.

A couple months ago Dad agreed to sell off two of his mutual funds with high expense ratios (Fidelity Magellan and "International Value") and half the shares of his only remaining individual stock. The cap losses on the funds were offset by the gains on the stock. The dividends & cap gains on his other mutual funds are being paid out in cash, not reinvested. He's about 70/15/15 stock/bonds/cash now (down from 85/15) but the cash will be rising over the next three years. Over the next few years we'll keep selling the rest of the stock and most of the equity mutual funds in a tax-efficient manner, but with the pension income he'll have enough cash for several years of expenses.

The worst financial surprise I can see would be if Dad had a medical crisis or an accident that hospitalized him (on Medicare). He'd eventually return to the care facility to resume his residency (with some weeks of rehab paid by Medicare). That would re-trigger John Hancock's 100-day exclusion and cost Dad a couple months out of pocket. However the policy would just be suspended and would restart after the 100 days. But Dad's physical health is OK now.

I'll have to spreadsheet all of this out over the next week or two, but I think his assets are going into autopilot (with annual tax-efficient equity sales) until 2014.

Next target: the lawyer's petitions for guardianship/conservatorship. She's supposed to be filing next week and we hope the hearing's before the end of Sep.

Dad broke his apartment lease at the end of July, but the property manager has been reeeeeal slow to tell us what's happening with Dad's security deposit. I'll sort that out next week. One more small gas/electric bill to come, and then that's all done too.
Sounds like you have made major progress getting the LTCI resolved. Congrats! All your work has paid off. This has been a great thread to read through and learn about the experiences everyone goes through with their elder family members.
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Old 08-19-2011, 11:38 AM   #125
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Take a look again at the LTC policy when an insured receiving benefits goes to a hospital to skilled nursing then back to the Alzheimer's unit. My Mom's policy didn't re-set the waiting period. Also see if his policy has a bed reservation clause.
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Old 08-19-2011, 12:36 PM   #126
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It sure sounds complicated to arrange all this. For my wife and me, there's no one to make geriatric arrangements for us except us. As I read through your account, I'm wondering how to get enough pieces into place over the next few years so that we can somehow survive for a time into old age. Why don't you write a book on it, and this time take the profits?
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Old 08-19-2011, 12:57 PM   #127
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Back when were going through it, I was told nursing homes will hold beds but not for long periods of absence... especially if they have waiting list.
Medicaid requires a NH to hold a bed for fifteen days when a Medicaid recipient is hospitalized. Generally, this is more than sufficient as hospitals rarely keep people more than a few days. This is the standard although some states permit an extra five days on appeal.
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Old 08-19-2011, 01:24 PM   #128
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... Our discussions with a geriatric lawyer were well worth the $700 we paid. We know we're on the right path document-wise and known the ropes to qualify for Medicaid when the time comes. If you are in this situation and want to explore vehicles to retain some of your relatives assets, a good geriatric lawyer can explain vehicles that will overcome the 5 year look-back provision with Medicaid; I expect this varies from state to state....
As I indicated earlier in this thread, I most certainly advocate getting the assistance of an attorney that has been trained in eldercare law. This means an attorney that understands Medicare, Medicaid, LTC insurance, estate planning, and advance directives. There are also shisters out there that claim to be able to help you "get around" the five year look-back provision for Medicaid. Don't buy into this. Your Department of Social Services (DSS) have experts that know exactly how and where to look to see if you have transferred mom or dad's assets to a trust, a corporation, or offshore. If you think no one will notice a little fraud here and there, I can tell you stories of two families that have made improper filings with the state and they are now working it out with the states attorney. By the way, they were denied admission to our NH for the same reason. Medicaid is a federal program but application and administration is done through a state agency such as DSS.

Make sure your attorney is a true eldercare attorney.
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Old 08-19-2011, 06:04 PM   #129
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Medicaid (IMHO) is a program designed to provide for the care of poor infirm citizens, not to preserve money for heirs. This is not a program to use because "we all pay into it." Yes, we all pay into it so that these people will not die under our bridges or.. God forbid.. must be cared for 24/7 by their families. Often Medicaid accepting care facilities are very basic because what they receive barely covers the cost of care. Some facilities will accept Medicaid only if the patient has resided in the facility for an extended period, they are not required to accept a Medicaid patient. Those facilities are often much nicer.

Back to my earlier rant, while a spouse's assets should be protected so that their daily needs can be met, a patent's assets should be used to pay for their care and public assistance (Medicaid) only when those resources have been exhausted.
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Old 08-19-2011, 07:29 PM   #130
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Nords-

Congrats on prevailing! It takes a lot of energy and perseverance in situations like this; I admire your fortitude. Your dad would be proud if he knew the details of your efforts.

Col K: excellent advice and a good caution but, honestly, who said anything about fraud? The look-back is now typically 5yrs; it used to be about 3 yrs and the qualification criteria were also more lenient. Guess why the rules changed? It certainly has nothing to do with fairness or need; it's the gummint's $ & cents. My point is that it's simply knowing what the rules are and following them (much like Nords made JH follow the rules of the contract they signed).

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Medicaid (IMHO) is a program designed to provide for the care of poor infirm citizens, not to preserve money for heirs. This is not a program to use because "we all pay into it." Yes, we all pay into it so that these people will not die under our bridges or.. God forbid.. must be cared for 24/7 by their families. Often Medicaid accepting care facilities are very basic because what they receive barely covers the cost of care. Some facilities will accept Medicaid only if the patient has resided in the facility for an extended period, they are not required to accept a Medicaid patient. Those facilities are often much nicer.

Back to my earlier rant, while a spouse's assets should be protected so that their daily needs can be met, a patent's assets should be used to pay for their care and public assistance (Medicaid) only when those resources have been exhausted.
Friends: there seems to be more parsing going on here than than slicing cheddar with a razor. This entire website is predicated on finding financial advantages, especially tax avoidance, for personal financial gain and eventual financial independence. But, for reasons I don't understand, some view that same behavior very differently when it comes to using Medicare/Medicaid in accordance with the existing regulations. Come on folks - let's be honest; especially with ourselves.
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Old 08-19-2011, 08:07 PM   #131
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Ah the sweet taste of victory! Congrats, Nords. And you did it without having to resort to lawyers or the insurance department. Very nice.
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Old 08-19-2011, 08:25 PM   #132
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Nords , You are doing a great job . We are going through something similar with my Mom and it is exhausting .
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Old 08-19-2011, 09:49 PM   #133
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It sure sounds complicated to arrange all this. For my wife and me, there's no one to make geriatric arrangements for us except us. As I read through your account, I'm wondering how to get enough pieces into place over the next few years so that we can somehow survive for a time into old age. Why don't you write a book on it, and this time take the profits?
I can save you all the time needed for writing & publishing: call Ho'okele Health and tell Dew-Anne or Bonnie I suggested you talk with them...
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Old 08-19-2011, 10:28 PM   #134
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Medicare is health insurance, not targeted for the poor. Medicaid is for the poor. Let me be honest here: those who do as you advocate are one degree away from stealing from us all.
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Old 08-19-2011, 10:44 PM   #135
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Come on folks - let's be honest; especially with ourselves.
I find it interesting that folks who post phrases like the one above seem to lack the ability to be honest with themselves.

Medicaid was not intended as a program to force taxpayers to fund inheritances.
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Old 08-20-2011, 12:03 AM   #136
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Col K: excellent advice and a good caution but, honestly, who said anything about fraud? The look-back is now typically 5yrs; it used to be about 3 yrs and the qualification criteria were also more lenient. Guess why the rules changed? It certainly has nothing to do with fairness or need; it's the gummint's $ & cents. My point is that it's simply knowing what the rules are and following them (much like Nords made JH follow the rules of the contract they signed).
Friends: there seems to be more parsing going on here than than slicing cheddar with a razor. This entire website is predicated on finding financial advantages, especially tax avoidance, for personal financial gain and eventual financial independence. But, for reasons I don't understand, some view that same behavior very differently when it comes to using Medicare/Medicaid in accordance with the existing regulations. Come on folks - let's be honest; especially with ourselves.
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Medicare is health insurance, not targeted for the poor. Medicaid is for the poor. Let me be honest here: those who do as you advocate are one degree away from stealing from us all.
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I find it interesting that folks who post phrases like the one above seem to lack the ability to be honest with themselves.
Medicaid was not intended as a program to force taxpayers to fund inheritances.
C'mon, guys, let's move the Medicaid debate to a different thread-- so that this one can continue without fear of moderator closure.

As far as I'm concerned, Medicaid is not an issue here. My father appears to have assets in excess of life expectancy. End of asset-sheltering discussion here-- take it to a new thread.
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Old 09-02-2011, 04:24 PM   #137
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Thanks for everyone's suggestions and links-- I've added them to a followup blog post:
More on caring for an elder’s finances | Military Retirement & Financial Independence
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Old 11-26-2011, 01:58 PM   #138
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"Quarterly update". Maybe this can go to a semi-annual or annual interval.

John Hancock and I have settled into a routine. It's a customer-hostile, cumbersome, and error-prone routine, but it's a routine. I forward the care facility's bills via fax-- no acknowledgment from Hancock, just a transmission log. Six weeks later Hancock snail-mails me a check, which Dad's brokerage will accept-- endorsed for deposit only, again via snail mail.

For some reason Hancock is sending me the policy's max limit of $240/day instead of the care facility's $214/day. This has happened for several months in a row now, and it's clearly labeled, so it's deliberate. I guess Hancock figures we have additional expenses or else they haven't caught a clerical error. I'm afraid to ask. We'll see if Hancock's inflation rider kicks in another 5% as scheduled for January. Of course the care facility may kick in an inflation rider of their own in March, when Dad will have been there for a year, and their inflation rider will probably be bigger than Hancock's. But hopefully I never have to speak to Hancock again.

Yes, I'm trashing Hancock on a public discussion board. If you're a Hancock employee and you want equal time, please post here or contact me. I'd love to discuss the procedures.

However once more I'm thankful that Dad bought the policy in late 1992, before the insurance companies had really figured out how expensive LTC would be. It's not a lottery to aspire to win, but it could pay more than 25:1 over his premiums.

Dad's doing fine in the care facility, and he's happy there. His Alzheimer's symptoms have stabilized with their care. He's coping with the myeloma symptoms and is waiting for chemotherapy. (Multiple myeloma questions and Questions on my Dad's diagnosis of "Waldenström's macroglobulinemia" ) He's sleeping more than he should (anemia and Vicodin for the pain), and he's weak, and he's losing weight, and these are all bad signs, but this is all in the category of "as well as can be expected". I guess the good news is that if Alzheimer's gives him the urge to wander then he won't go far. I haven't heard of a chemo start date yet but the oncologist might be waiting on medications or arranging the first session around the holidays or straightening out some other medical issue. The billing has gone fine and my brother will let me know when the chemo starts. Considering that the only other options are palliative, there aren't really any other options.

Our lawyer has finally managed to prep & file the petitions. I've learned that guardianship/conservatorship petitions are considered a low-margin service that all lawyers promptly drop to the bottom of their "To Do" list. However our lawyer's filing was also full of "typographical errors". Those errors were pointed out by my brother and me when she drafted them, but somehow they still made it to the final version. It's almost as if she never bothered to correct the typos that we pointed out to her.

We've also experienced a number of other lawyer "lack of contact" excuses problems that would be amusing if we hadn't already sunk so much time & effort into this particular member of the bar. Maybe she's actually saving us a lot of money by not bothering to respond to our phone calls & e-mails. I guess more "good" news is that she's agreed not to bill us for whatever it was she wasn't doing in August & September. I haven't seen a bill since June but it'll be interesting to compare her timesheet to my logs. Let's just say that if you're looking for a Colorado lawyer, I can suggest who not to call. My brother and I have discussed filing complaints and pushing for legal censorship and other punitive reprisal options, but the reality is that we just want to pay a reasonable bill and move on with our lives.

Last month we got a call from the probate court's interviewer. He's a retired civil servant who gets paid $100 to interview the parties to the petition and report back to the probate judge. It's his job to get you babbling away on the phone, but even so he was quite enjoyable to talk with and he explained a lot of the process. He also commented on how good my Dad is at bluffing by affably socializing without actually contributing hard info to a conversation. If he'd run into Dad at a coffee shop and struck up a chat, he never would have realized that Dad was so far into Alzheimer's. Dad wants my brother and me to take over guardianship/conservatorship (not that he's considered competent to make that decision) so the hearing should go quickly.

Over the 30-minute interview I learned what to expect from the court appearance, what questions the judge might ask, and how the court oversees the conservators. He mentioned a state association of guardians who would help families file their petitions without any lawyers at all, and who also help guardians with support groups & counseling. (I'll have to see if Hawaii has a conservator support group.) He even asked why I thought I was qualified to be a conservator-- that went way beyond the petition's documentation into a discussion of early retirement, investing experience, blogging, and publishing the book. He said that when you petition for conservatorship it is not a time to be humble. He said that the court has no problems with conservators reimbursing themselves for expenses incurred for their ward's benefit. (This means I can continue to reimburse myself if I have to make a credit-card charge.) They're more concerned that every penny of spending is accounted for and that no fraud or neglect is occurring. He asked a few questions about how Dad's bills are being paid now, and he seemed happy with the answers.

By this point it was clear that our lawyer was not effectively communicating, so I flung caution to the winds and shared a couple concerns with the interviewer. My father thinks I'm his old college roommate, so if I had to appear in a courtroom and was addressed as his son in his presence then it would cause quite a bit of confusion. The court has flexibility with uncontested petitions, and the interviewer said that he'd log our concerns and request that my "appearance" be done by phone.

Last week the lawyer's paralegal called to announce that we're on the court calendar for 19 Dec. I'll be able to phone in (voice only, no Skype required). Assuming everything goes well, I should have my conservator's appointment letter shortly afterward.

The next step will be contacting Dad's bank manager with the appointment letter so that we can move his checking account (paying 0.05% interest) into a CD ladder. I'll set up an EFT link to his Fidelity brokerage account so that we can move money as needed. (The bank CDs might be better than the brokerage.) Finally, Dad has a minimum-balance Vanguard account in their S&P500 index so I'll ask Fidelity to transfer those shares in-kind and then shut down the Vanguard account. I don't need to use his credit cards (which have already expired) so I'll just keep the company's new cards in our files until they decide to close his account.

When 2012 arrives I'll do some more tax-efficient rebalancing to get rid of more stocks (and equity mutual funds with high expenses) to raise Dad's cash allocation. (He's about 70% equities now, and that needs to drop to about 25% or less. Earlier this year he was over 85%.) Last year his tax return only took a couple hours and this year, since I don't have to search for his tax files, it should be even faster.

This has been a hellacious learning curve but it's starting to flatten. I'm reading "A Bittersweet Season" by Jane Gross so I have a new appreciation for "bad".

I'm thankful that Dad lived such a low-key lifestyle for the last 20 years. (I know that he enjoyed its simplicity and freedom.) For most of that time he was easily banking half his pension check and all of his Social Security. He lived in a bare-bones 2BR apartment in a small Western town and drove a 12-year-old Explorer. He bought few toys, owned minimal material possessions, and his closets were mostly empty. His hobbies were investments, reading, and hiking the western national parks. He substantially bolstered his net worth. His spending steadily declined during his ER and his consistent savings left him financially sound for the rest of his life. Ty Bernicke claims that elder spending drops as we hit our 70s, and that's been the case with my Dad too. Between his insurance and his modest assets, I'm pretty sure that he won't run out of money.
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Old 11-26-2011, 02:25 PM   #139
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Unless the tax code has changed since I helped my parents with their returns the care facility bills (excluding sundries, hair cuts) are medical expenses. The LTC payments may or may not be income, you need to look at the contract. If it is income you may be able to deduct what he paid in premiums, check with IRS.
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Old 11-26-2011, 02:37 PM   #140
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Quote:
Originally Posted by Brat View Post
Unless the tax code has changed since I helped my parents with their returns the care facility bills (excluding sundries, hair cuts) are medical expenses. The LTC payments may or may not be income, you need to look at the contract. If it is income you may be able to deduct what he paid in premiums, check with IRS.
Those statements are all still correct. So as long as the LTC policy is covering the bills then there's no deduction. After the LTC payments stop then his medical expenses will be over $80K/year, which will take care of taxes.

Hancock, bless their pointy little heads accounting expertise, was quick to point out that reimbursing care expenses in arrears means that the insurance payment is not taxable income.
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