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Give away assets or buy long term care insurance
Old 02-17-2010, 03:56 PM   #1
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Give away assets or buy long term care insurance

I have a 74 year old relative that asked me should he give away assets or buy long term care insurance? He would be fine giving them away if more than five years passed. I don't know which way he should go so I decided to tap the wisdom of this board.
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Old 02-17-2010, 03:59 PM   #2
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I guess what you are infering to is that by giving away assets he would then qualify for state funded senior care if needed. is that what you are referring to ?

Where I live they look back a number of years at assets and do a clawback on assets should the state have to start paying. It is much more difficult now to sign the house and bank accounts over to a son/daughter or other relative and still qualify for senior aid.
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Old 02-17-2010, 04:11 PM   #3
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How much is long term care insurance for someone 74 in good health?
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Old 02-17-2010, 04:16 PM   #4
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There are so many variables associated with this decision its very difficult to recommend a solution. However, I would lean towards insurance to fund say 2 years of care. The reasoning behind this is that then he could choose his care provider and if he was still there after 2 years then usually Medicaid takes over and you remain in place. The problem with the 5 yr plan is he may not make it that long and all $$ would have to be repaid. They have all sorts of LT care plans but they can be complicated to sort through. Is there someone who could help, like a fee based LT care planner?
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Old 02-17-2010, 04:17 PM   #5
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If you'd be a little more specific as to what you had in mind we could help you better.


Quote:
Originally Posted by rec7 View Post
How much is long term care insurance for someone 74 in good health?
here's a link to a calculator form the Federal Insurance Company:

https://www.ltcfeds.com/ltcWeb/do/as...ds/ratecalcOut

It looks like from them Long Term Care Insurance would be around $400 a month or so.

As with anything - shop around and compare policies before you buy.
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Old 02-17-2010, 04:19 PM   #6
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Too many variables to give a firm answer (daily benefit, waiting period, inflation rider, length of coverage, etc.) but I would estimate you would be looking at a minimum of $300 - $400 per month for any sort of decent coverage. And rates will continue to go up over time.
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Old 02-17-2010, 04:20 PM   #7
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There are so many variables associated with this decision its very difficult to recommend a solution. However, I would lean towards insurance to fund say 2 years of care.
I would add that if he chooses this option he should give away all the rest now so the wait time for claw-back would be only 3 years.
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Old 02-17-2010, 04:23 PM   #8
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Have you seen the difference between private facilities and public ones? Have your
relative check them out, they might change their mind.
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Old 02-17-2010, 06:02 PM   #9
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I would add that if he chooses this option he should give away all the rest now so the wait time for claw-back would be only 3 years.
As far as I know they changed it to a 5 year look back. The relative wants something to be left for the heirs. What would people on this board do?
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Old 02-17-2010, 07:40 PM   #10
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As far as I know they changed it to a 5 year look back. The relative wants something to be left for the heirs. What would people on this board do?
What I was trying to say is if he pays for 2 yrs.(and gives away rest of money) then after 3 yrs, if care is needed, he has a 2 yr cushion and still meets the five yr look back, plus gets to choose his place of care. Does that make sense.
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Old 02-17-2010, 07:51 PM   #11
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As far as I know they changed it to a 5 year look back. The relative wants something to be left for the heirs. What would people on this board do?
Screw the heirs. His heirs would probably agree with this sentiment.

He can visit various facilities to see what he gets for Medicaid versus what he could get from long-term care insurance, and I suspect that he'd opt for the insurance.

I think his heirs would prefer that he have a better quality of life instead of coping with Medicaid for "their benefit". I know that's how I felt when my grandfather lived for nearly 14 years in a full-care facility. His LTC didn't quite cover all the costs, either, but he died just a few months short of when his assets would have been spent down for Medicaid. I'm hoping that we have similar "successes" with my father and with spouse's parents.
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Old 02-17-2010, 10:46 PM   #12
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What I was trying to say is if he pays for 2 yrs.(and gives away rest of money) then after 3 yrs, if care is needed, he has a 2 yr cushion and still meets the five yr look back, plus gets to choose his place of care. Does that make sense.
Yes I got a little confused at first.
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Old 02-17-2010, 10:48 PM   #13
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One more idea. How about a whole life insurance policy. In the long run it is about the same cost as long term care insurance but is guaranteed to pay off.
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Old 02-17-2010, 11:06 PM   #14
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One more idea. How about a whole life insurance policy. In the long run it is about the same cost as long term care insurance but is guaranteed to pay off.
Yes its a guaranteed payoff but someone has to make the payments even after he's broke.
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Old 02-17-2010, 11:09 PM   #15
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He can visit various facilities to see what he gets for Medicaid versus what he could get from long-term care insurance, and I suspect that he'd opt for the insurance.
Bingo! I wouldn't wish on my worst enemy the experience of their last days being in a Medicaid facility... would only work if your mind was completely and totally gone.

No need to go any further in the analysis than this...
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Old 02-18-2010, 12:57 AM   #16
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I have a 74 year old relative that asked me should he give away assets or buy long term care insurance? He would be fine giving them away if more than five years passed. I don't know which way he should go so I decided to tap the wisdom of this board.
Am I the only one here who thinks the first option is just plain wrong?

I think that if the gentleman can afford to buy LTC insurance, that's what he should do, and if not he should pay for his own care (when needed) to the extent he's able to. I don't mind my taxes going to provide care for people who are genuinely destitute, including him if he exhausts his assets, but IMO for a person to deliberately give away everything they own so somebody else (i.e. you & me) has to pay their bills is uncomfortably close to a scam.
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Is giving away assests the right move?
Old 02-18-2010, 07:19 AM   #17
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Is giving away assests the right move?

My mother is close friends with a couple who are also in their eighties. Some time ago they transferred their ownership in their home and property to their children. They thought they had enough money to live on the rest of their lives. With interest rates falling to next to nothing, and probably living longer than expected, they are about out of money and no longer have any assets they can sell. I do not know the extent of what their children can do for them but it has to be a blow to this couple not to be able to support themselves anymore because they thought they could beat the system.
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Old 02-18-2010, 07:48 AM   #18
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Am I the only one here who thinks the first option is just plain wrong?

but IMO for a person to deliberately give away everything they own so somebody else (i.e. you & me) has to pay their bills is uncomfortably close to a scam.
My mother certainly agrees with you. Many years ago, she mentioned she saw this strategy being discussed on a tv program. She had a few choice words for the program I will not get into here. Let's just say I'm glad I didn't recommend the strategy. My dad passed without going to a nursing home and so far my mother has avoided it and she's 92. Never bought LTC insurance either.

I bought a plan through my old company a few years a go. Still at a good rate although I know it will go up at some point. Won't pay for everything, but will take care of a good chunk of it. Debatable whether I need it or not, but does give me some peace knowing I should never worry about going into a public facility home.
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Old 02-18-2010, 08:08 AM   #19
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Am I the only one here who thinks the first option is just plain wrong?
No.
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Old 02-18-2010, 08:14 AM   #20
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This public versus private nursing home or ALF thing may not be as obvious as people think. It is very situational.

Assuming that basic minimal standards of safety, hygiene, etc. are present (not always the case but usually the basics are intact), the add-ons sometimes bring more comfort to the family than to the elderly resident.

Depending on the level of awareness and cognition, it may be that the patient would be as content in a sparse NH than at the Ritz. With family involvement, the amenities that really matter can be sustained even in a "public" Medicaid facility. Visits, small mementos from home, a small privately owned TV and radio, the occasional home-made meal, regular visits, treating the staff and nurses so they feel appreciated, etc.

Yes, there are some places that are horrible (including expensive places) but I think some of the predominantly Medicaid facilities manage to do a decent job. We ran into this when my FIL became unexpectedly placed in such a facility during the 2004 hurricane outbreak in Fla. At first the family was horrified at the lack of frills. But the place was clean, the staff was 90% sincere and caring, and bad as that time was, it could have been a lot worse.

I also am opposed to people scheming to dump the cost of such a stay on the taxpayers when they have the assets to offset those costs. Planning is one thing, scheming is another.
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