Give away assets or buy long term care insurance

rec7 said:
After giving it a lot of thought. It looks like he should pay for the nursing home with assets and buy life insurance. With the heirs paying the premium when he runs out of money. It is guaranteed and the premium does not change. If he does not use the nursing home the heirs get the assets and the insurance. What are the pros and cons of this? I will check out the LTC Partnership.
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He will have to take a physical exam to get the life insurance. He could be denied.
 
Good point and it looks expensive at 74. One company said 11k a year for 500k coverage. He is a little bit overweight but in good health.
 
Since I don't identify with the concept of leaving an estate to heirs, I guess I'm wondering why he doesn't simply do nothing. No insurance, no pre-inheritance. If he (and his heirs) are lucky, he'll live a long, healthy life and then leave a little or a lot to the heirs. If he has to go to a facility, he will self pay until the money runs out and then go on Medicade. No scam, no fuss, no muss. Only real downside is there is a chance the heirs might receive nothing. I'm taking a wild guess that they are just fine with that. I would be (and was with my parents who came out even).

Just my 2 cents worth. YMMV
 
He is not trying to do anything that is illegal it is all within the limits of the law.
 
I think this may be the best plan.

I think it is the one I will use down the road.


Koolau said:
Since I don't identify with the concept of leaving an estate to heirs, I guess I'm wondering why he doesn't simply do nothing. No insurance, no pre-inheritance. If he (and his heirs) are lucky, he'll live a long, healthy life and then leave a little or a lot to the heirs. If he has to go to a facility, he will self pay until the money runs out and then go on Medicade. No scam, no fuss, no muss. Only real downside is there is a chance the heirs might receive nothing. I'm taking a wild guess that they are just fine with that. I would be (and was with my parents who came out even).

Just my 2 cents worth. YMMV
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Sometime back I read an article on the best LTC you can get on the cheap is to continually book a cruise. And if you are on the boat long enough, you keep getting upgrades. What is the down side to this concept?
 
JOHNNIE36 said:
Sometime back I read an article on the best LTC you can get on the cheap is to continually book a cruise. And if you are on the boat long enough, you keep getting upgrades. What is the down side to this concept?
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The U.S. government has given me several six-month cruises and a handful of 90-day cruises, all expenses paid. I don't remember any "upgrades"...

I think I've read the cruise-ship article. There really isn't any downside as long as you stay healthy and are not averse to making 2000 new friends every week and then having to start all over again next week with a new set of friends. If you have significant health problems, though, let alone something like a broken leg, then you're off the ship in the next convenient port.

But IIRC Cunard and one other line had a couple of perpetual passengers. I'd think that it would start to resemble the movie Groundhog Day.

I remember reading another article about a couple who were staying at an inn (in America? Britain?) for something like two decades.

My parents-in-law have met the man known as "The Wandering Jew", a perpetual Elderhostel attendee with a string of (at last count) over eight consecutive years. But that was over five years ago and I don't know how it turned out.
 
Nords said:
The U.S. government has given me several six-month cruises and a handful of 90-day cruises, all expenses paid. I don't remember any "upgrades"...

I think I've read the cruise-ship article. There really isn't any downside as long as you stay healthy and are not averse to making 2000 new friends every week and then having to start all over again next week with a new set of friends. If you have significant health problems, though, let alone something like a broken leg, then you're off the ship in the next convenient port.

But IIRC Cunard and one other line had a couple of perpetual passengers. I'd think that it would start to resemble the movie Groundhog Day.

I remember reading another article about a couple who were staying at an inn (in America? Britain?) for something like two decades.

My parents-in-law have met the man known as "The Wandering Jew", a perpetual Elderhostel attendee with a string of (at last count) over eight consecutive years. But that was over five years ago and I don't know how it turned out.
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Part of the duties for AC's, is manning Base Ops and handling Space-A travellers. We used to have what we referred to as "Space-A bums". Retired guys who fly from base to base, live in the transient barracks, and eat in the galley. After a couple of days they fly on to another base, rinse and repeat. I suppose their permanent address was with a relative or friend somewhere. Moreless a jet age variation of the railroad hobo.

Harder to do today with all the base closings.
 
I seem to forget some of what I've researched on LTC insurance as it's been a while. However, I think that certain LTC policies provide expenses for at home care and assisted living. Both seem better options for someone who doesn't need full blown institutional care. Medicare and medicaid are not very generous when it comes to assisted living and at home care. My parents lived in a moderate sized town and the best nursing homes availible accepted medicaid.
 
Virtually all currently sold LTC policies cover home care and assisted living. Sometimes there's a lower daily cap, but you choose that when you buy the policy.
 
It would help if you provided a little more information. What kind and amount of assets, state of health, etc.

Assuming a dependent or spouse is not in the picture and the person is not wealthy (modest means)... I would not recommend giving away a cent until death (part of the estate).

If this person thinks they will need help in the future with day to day living, they might consider LTC insurance (if it is affordable at that age... probably not). If they are experiencing a health problem now.... it is probably to late (insurance companies probably will not issue a policy). Assuming LTC is not a reasonable approach for someone at that age... Use the money to hire help in the home or to get into a better nursing home if the need occurs.

If they give away their money... they give away their options! And for what? So someone else can blow the money? :confused:
 
Basically, the guy is admitting that he doesn't have the money to leave to heirs (he needs it for his long term care), but he wants to anyway?

Audrey
 
Gaming the rules may be technically legal, but many people (me included) believe it to be ethically wrong. Regardless of how you feel about that, you should consider that the "game" is risky. Clawback rules can be changed whether the money is still there or not. Deliberately and voluntarily making oneself indigent may get you public assistance for minimal nursing home care, but if any other life event requires money or a little extra expense might improve quality of life you are in trouble. For me, the added worry of skating close to the edge would be a huge factor decreasing quality of life.
 
If I recall correctly, the life insurance plan will not work. My elderly aunt lived in a nursing home for many years all paid for by medicaid. When she passed away, the state required us to pass on any life insurance money over to them due to the fact that it had paid for her expenses for all those years. We gladly did so since the nursing home where she was staying treated her with great dignity and respect the last years of her life.

My mother, now 95 years old, has told me she does not plan to give away her assets to "game" the system since she thinks of it as stealing. She has done it on her own all her life and she isn't going to stop now. If she ever needs nursing home facilities, she plans to go to the place my aunt was at and pay her own way as long as possible. I agree with her decision.
 
teejayevans said:
Have you seen the difference between private facilities and public ones? Have your
relative check them out, they might change their mind.
TJ
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Can you expand on what the differences are? I am if your in bad enough shape that you can't take care of yourself, what more do you need other than a room?
 
skyvue said:
Can you expand on what the differences are? I am if your in bad enough shape that you can't take care of yourself, what more do you need other than a room?
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State of the facility and [-]Level of neglect[/-] Quality of care.
 
skyvue said:
Can you expand on what the differences are? I am if your in bad enough shape that you can't take care of yourself, what more do you need other than a room?
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Generally, private pay customers are a much desired commodity with NH's. A discussion with management concerning less than optimum situations involving staff, facilities, food, whatever will usually prompt corrective action for private pay folks. The NH doesn't want you moved to a competing facility. They may not be as responsive to the requests of a customer on welfare who they would probably prefer to move to a competitor's facility than have them stay.

Public facilities usually involve a shared room. Depending on your personality and your roommate's demeanor, this may be a good thing or might make you absolutely miserable. YMMV.

I'm sure the shared vs private room while on the public dole varies from state to state and situation to situation. But the choice is taken away from you if you're relying on welfare funds while living out your last days.....

Generally, the less you can count on relatives (most frequently kids), friends, whoever, to be consistent advocates for you or your loved one, the bigger advantage to being private pay where the NH wants your business and aims to keep you and your loved ones satisfied with the service/care provided.
 
potto0213 said:
If I recall correctly, the life insurance plan will not work. My elderly aunt lived in a nursing home for many years all paid for by medicaid. When she passed away, the state required us to pass on any life insurance money over to them due to the fact that it had paid for her expenses for all those years. We gladly did so since the nursing home where she was staying treated her with great dignity and respect the last years of her life.

My mother, now 95 years old, has told me she does not plan to give away her assets to "game" the system since she thinks of it as stealing. She has done it on her own all her life and she isn't going to stop now. If she ever needs nursing home facilities, she plans to go to the place my aunt was at and pay her own way as long as possible. I agree with her decision.
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I did not explain it good enough. He would be spending his own money until he ran out, then the heir would get the life insurance. Do you think 11k a year for life insurance is crazy for someone who is 74 on a 500k policy.
 
rec7 said:
I did not explain it good enough. He would be spending his own money until he ran out, then the heir would get the life insurance. Do you think 11k a year for life insurance is crazy for someone who is 74 on a 500k policy.
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Based upon what Potto said you would have to shoot him once he ran out of money to avoid handing over at least a portion of the life insurance to the NH. It really depends on how long he lives after his money (LT care policy) runs out.
 
rec7 said:
I did not explain it good enough. He would be spending his own money until he ran out, then the heir would get the life insurance. Do you think 11k a year for life insurance is crazy for someone who is 74 on a 500k policy.
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What potto0213 is saying is that the state may intervene and confiscate the proceeds of the LI policy as compensation for providing state welfare NH care. You might want to obtain professional advise for how the LI policy would be owned, who pays, etc. to be sure this would work. The value of a WL LI policy he owns is an asset he would have to declare to qualify for welfare.

$11k/yr for a $500k whole life policy for a 74 yr old male sounds cheap. Do you actually have a quote for that amount?
 
Also consider the difference in types of care available with LTC - such as in home care, having someone come in to cook or cut the grass.
 
youbet said:
$11k/yr for a $500k whole life policy for a 74 yr old male sounds cheap. Do you actually have a quote for that amount?
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Yeah, be sure to check the fine print where it says: "insured must die in the 25th mile of a 26 mile marathon".
 
in bad enough shape that you can't take care of yourself, what more do you need other than a room?
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I will try to answer this as if it were a serious question.

The physical quality of the facility and the room can be vastly different. Just because I cannot walk or care for myself doesn't mean I am oblivous to the surroundings or their cleanliness. Likewise, the better private facilities treat the patients like guests. Asking nicely, cajoling or humoring the residents into activities or therapy that are good for them. Poorer public facilities are an assembly line with minimal defensible (usually) standards of care. Smiles and extra tme and attention are much more common in nicer private facilities.

For me the clinching argument however is about medical care. Everyone I personally know (3 family members) who has been admitted to such a facility has at some time or another had a problem with medication. A diose needed to be adjusted. A dose was adjusted poorly and needed to be reconsidered. An unexpected side effect developed. In every case it took considerable followup by family members to get the medical staff to make the needed adjustments or investigate more thoroughly. In each case, the initial pronouncement was that we should expect these kinds of abrupt declines and they were ready to move the patient to the terminal, incoherent or dementia care that would anticipate end of life in a few months at most. In all three case, the result of the considerable family pressure was changes in prescriptions and care that caused "remarkable improvement" and return to the previous quality of life and many more years of coherent intelligent (semi-assisted) life. I doubt we would have had such favorable outcomes in a public facility that had less financial incentive to address family concerns.

Personally, I would like the best care my money could buy when I am too feeble to do a lot about it. I hope my parents do the same.
 
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