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Medicare/Medicaid help for the inlaws
Old 01-20-2019, 07:13 AM   #1
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Medicare/Medicaid help for the inlaws

My in laws are both in their 88th year. My MIL is failing physically, however still pretty sharp mentally. My FIL is good physically, but dementia has started and has gained ground quickly, over the last 4 months.

A revocable Trust was set up about 10 years ago, but unfortunately nothing was moved into it, however all the "legal" documents/requirements are all nice and tidy and starting to be used.

My FIL was the bread winner of the family and 70% of the assets are in his name. We're trying to balance that out right now, for the protection of my MIL, in the event my FIL needs to go into a Memory Care facility.

Let me say, that based on the rules for Medicaid I've read, my FIL has plenty of assets in his 401K & IRA, to fund that, or I'm pretty sure, however it's feasible that he could live another 5 to 10 years. Those assets would be used first, for his care.

I'm throwing this out there and asking for any experience or advice or things to consider, to make sure my MIL is taken care of. Unfortunately the stress of dealing with my FIL, is putting a strain on her.

My DW and SIL are doing everything they can to help out, including paying bills on line, banking, groceries, meals, light cleaning etc.. Just looking for other idea's on what we might be missing.

At some point we'll consider more full time help on a daily basis. My FIL can still take care of himself, mostly but we're keeping a close eye on any major changes.

Thanks in advance! My Father always said that getting old, wasn't for sissies and he's right.
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Old 01-20-2019, 09:40 AM   #2
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... Just looking for other idea's on what we might be missing. ...
Sorry to say, what you're missing is an expert elder law attorney who knows your specific state laws and regulations. SGOTI will not do.

Do not delay. If FIL is failing, today he may or may not be competent in a legal sense. Every day of delay, however, makes this less likely and further constrains options.
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Old 01-20-2019, 10:14 AM   #3
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Thanks OldShooter! The revocable Trust was originally set up by an Elder Law Attorney and "the girls" have met with them, once again at Christmas, so I think the "I's" have been dotted and the "T's" have been crossed and that is what has spurred the recent action by them to balance out the assets. Financial power over his assets is in tact. In hindsight, that should've been done 10 years ago, but alas .....

It's good advice and thanks again. Just looking for things we haven't thought of. Maybe someone else out there has had a similar experience.
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Old 01-20-2019, 11:00 AM   #4
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IME a revocable trust won't shelter any assets from long term care. A spouse is expected to use assets to care for their husband or wife..
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Old 01-20-2019, 11:38 AM   #5
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Yes, you are correct. The revocable Trust is set up to give powers where need be and at passing, ensures that the estate doesn't have to go through probate.

If my FIL goes in to a Memory Care facility, we can use his 401k and IRA to pay for it, which should be adequate. If "at home care" is needed, we can use that money, as well, to pay for that. Should be more than enough and we will use that money first. It's just that there is more money in "his name", (primarily retirement money) than there is in my MIL's, which would be used for "his" care and not hers.

If more money is needed beyond that, the joint assets would be used to pay for it, unless an irrevocable Trust is set up.

I also know that we need to start putting "his" name in at some facilities, at least get on a list. This would be up in Michigan and not sure how long the wait list is, at some preferred facilities.

Lots of decisions will need to be made sooner rather than later and we just want to make sure we do the best that we can for both of them.

My MIL and FIL, took care of their "girls", provided for them and gave them the best educations they could, so they just want to do this right for their parents. Both of the girls are financially ok.
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Old 01-20-2019, 11:51 AM   #6
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Yes, you are correct. The revocable Trust is set up to give powers where need be and at passing, ensures that the estate doesn't have to go through probate.

If my FIL goes in to a Memory Care facility, we can use his 401k and IRA to pay for it, which should be adequate. If "at home care" is needed, we can use that money, as well, to pay for that. Should be more than enough and we will use that money first. It's just that there is more money in "his name", (primarily retirement money) than there is in my MIL's, which would be used for "his" care and not hers.

If more money is needed beyond that, the joint assets would be used to pay for it, unless an irrevocable Trust is set up.

I also know that we need to start putting "his" name in at some facilities, at least get on a list. This would be up in Michigan and not sure how long the wait list is, at some preferred facilities.

Lots of decisions will need to be made sooner rather than later and we just want to make sure we do the best that we can for both of them.

My MIL and FIL, took care of their "girls", provided for them and gave them the best educations they could, so they just want to do this right for their parents. Both of the girls are financially ok.
Having trouble understanding your logic here...what are the tax issues with using tax deferred money.why wouldn't you just let that continue to grow? I don't understand your his and hers logic.
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Old 01-20-2019, 11:54 AM   #7
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IME a revocable trust won't shelter any assets from long term care. A spouse is expected to use assets to care for their husband or wife..
Yep. In Illinois anyway, moving money to an revokable trust does not protect it from being an available asset during Medicaid eligibility testing.
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Old 01-20-2019, 12:15 PM   #8
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Having trouble understanding your logic here...what are the tax issues with using tax deferred money.why wouldn't you just let that continue to grow? I don't understand your his and hers logic.
And why I am asking questions ......

My understanding is that by law, for Medicaid, all of "his" retirement assets are protected for his use and his use only, if needed under these circumstances. So, if he goes into a MC facility and we burn thru all of his retirement assets (401K, IRA), the next assets that would get used, would be the joint ones.

The joint ones would be used for both "his and her" care. If all of his retirement assets are gone, he's in a MC facility and what's left is about 3 years worth of LTC, we'd go the route of an Irrevocable Trust, to ensure that my MIL has assets to live on, or use for her LTC. At that point, my FIL would go on Medicaid and probably stay at the facility he's in.

If "she" goes into LTC and everything is gone, so be it. I just don't want my MIL to have to step into a Medcaid facility, that would take her, wherever, right from the start. We'd prefer to have a little choice for her.

Maybe I'm over thinking this or missing something. I know Medicaid has some financial calculations that are made, for what the spouse that is still in the home, can keep, but it's not much.
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Old 01-20-2019, 12:34 PM   #9
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And why I am asking questions ......

My understanding is that by law, for Medicaid, all of "his" retirement assets are protected for his use and his use only, if needed under these circumstances. So, if he goes into a MC facility and we burn thru all of his retirement assets (401K, IRA), the next assets that would get used, would be the joint ones.

The joint ones would be used for both "his and her" care. If all of his retirement assets are gone, he's in a MC facility and what's left is about 3 years worth of LTC, we'd go the route of an Irrevocable Trust, to ensure that my MIL has assets to live on, or use for her LTC. At that point, my FIL would go on Medicaid and probably stay at the facility he's in.

If "she" goes into LTC and everything is gone, so be it. I just don't want my MIL to have to step into a Medcaid facility, that would take her, wherever, right from the start. We'd prefer to have a little choice for her.

Maybe I'm over thinking this or missing something. I know Medicaid has some financial calculations that are made, for what the spouse that is still in the home, can keep, but it's not much.
Converting to an irrevocable trust might be subject to the five year lookback rule at that point. In Illinois your plan would disqualify your FIL for Medicaid. Check with your attorney.
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Old 01-20-2019, 12:37 PM   #10
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Yes the 5 year look back rule would apply ..... but we have to start somewhere. Again, just looking out for MIL. A reasonable chance that neither one of them will be around in 5 years.
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Old 01-20-2019, 01:23 PM   #11
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All the "legalities" we'd leave and seek advice from the attorneys. Just wondering if there are other things for us to consider.
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Old 01-20-2019, 01:44 PM   #12
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Yes the 5 year look back rule would apply ..... but we have to start somewhere. Again, just looking out for MIL. A reasonable chance that neither one of them will be around in 5 years.
From what you are saying your FIL isn't alert enough to sign up for anything legal binding now. Be very very careful of how you handle this situation.
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Old 01-20-2019, 02:01 PM   #13
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Understood ... and thanks.

He's not quite that bad yet, however the advice from the attorney is being followed and it's primarily to take care of him, when the next step needs to be taken. The next step may never happen or in 6 months we have to make some hard choices.

Really, just trying to get everyone prepared for what could or will happen. Get these things figured out and understood, prior to the next decision, which will likely get emotional. I don't like making hasty decisions, when a plan can be put in place.

I am taking all sorts of notes and hopefully in the not too distant future, get the right plan in place for my wife and I.
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Old 01-20-2019, 04:04 PM   #14
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@canuk5 I think what several of us are keying into is your statements that assets haven't been moved into the rev trust and that 70% of the assets are in FIL's name. AFIK he is the one that has to move those assets and he can do that only if he is legally competent. So unless your attorney is unconcerned by this situation, I still think that you need to take action on those transfers if/when FIL is still legally competent.

Same thing applies for any other legal actions that he needs to take.

My son has a friend going through this right now; her mother has died and had not, before dying, made all the transfers to the rev trust that the attorney told her to make. Fortunately she was still competent on her deathbed and was able to sign one deed, an action that eliminated an out-of-state real estate probate.
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Old 01-20-2019, 04:45 PM   #15
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About 15 years ago, when we lived in the States, we moved my wife's widowed father from his house in Florida to New England, where we lived and where there were some really good assisted living facilities. As part of this process we moved his banking from the Florida branch of his bank to the one in our state.

During the process, in our local branch, the person behind the desk asked my FIL some questions about the account number, etc. and he kept looking to us for the answers, which we gave. He was in early stages of dementia. At one point the accounts person asked my FIL, "Mr. X, are you making this move from Florida on your own volition?" FIL said, "I don't understand." She replied, "Mr. X, I need to ask you: are you being forced to move these funds? Are you being kidnapped?" FIL laughed and explained that his memory was getting bad and that he wanted nothing more than to be near his daughter. So, all was fine and the accounts were moved.

At home my wife was furious: "How could she even think such a thing?" I suggested that it was nothing personal, she didn't know us, and that I was actually quite happy that she took that extra step.

BTW, we soon enough hired an elder attorney -- for FIL -- and accompanied him to his meetings with her, at his request. She made it clear from the start that she represented him and not us, which was what we wanted also.

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Old 01-20-2019, 04:48 PM   #16
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Understood. By documents, of the revocable trust signed 10 years ago, with the Elder Law Attorney, my MIL has the power and authority, now, to transfer the assets and that is part of what is going on. His 401k and IRA can't legally be transferred in, but she now has the power to use those assets for and on his behalf.

Just wished it had been done when she was 78 and not 88. Lessons which I hope to learn and take heed on.
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Old 01-20-2019, 04:53 PM   #17
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About 15 years ago, when we lived in the States, we moved my wife's widowed father from his house in Florida to New England, where we lived and where there were some really good assisted living facilities. As part of this process we moved his banking from the Florida branch of his bank to the one in our state.

During the process, in our local branch, the person behind the desk asked my FIL some questions about the account number, etc. and he kept looking to us for the answers, which we gave. He was in early stages of dementia. At one point the accounts person asked my FIL, "Mr. X, are you making this move from Florida on your own volition?" FIL said, "I don't understand." She replied, "Mr. X, I need to ask you: are you being forced to move these funds? Are you being kidnapped?" FIL laughed and explained that his memory was getting bad and that he wanted nothing more than to be near his daughter. So, all was fine and the accounts were moved.

At home my wife was furious: "How could she even think such a thing?" I suggested that it was nothing personal, she didn't know us, and that I was actually quite happy that she took that extra step.

BTW, we soon enough hired an elder attorney -- for FIL -- and accompanied him to his meetings with her, at his request. She made it clear from the start that she represented him and not us, which was what we wanted also.

-BB
My FIL would answer all those questions correctly, or at least now he would, however he just wouldn't remember that he went to the bank. Like you, I am glad that some people would "ask" those tough questions on his/her behalf!
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Old 01-20-2019, 05:16 PM   #18
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... At home my wife was furious: "How could she even think such a thing?" I suggested that it was nothing personal, she didn't know us, and that I was actually quite happy that she took that extra step. ...
In addition to DW being a megabank SVP she was vice-chair of our states Board on Aging, and she attended the President's Council on Aging as an invited attendee. Her number is that 85% of elders have suffered from some kind of financial abuse and that the majority of it is from family members. Typically, it is not reported because the victim is not competent or, often, because the victim is embarrassed and does not want to cause trouble.

That bank clerk was doing her job. Many others who come into contact with elders will also ask similar questions and make careful observations. All states have statutes that designate "mandated reporters" who must report suspected elder abuse (of any kind) to authorities. Typically these are what you would expect: health care professionals, nursing home administrators, clergy, financial advisors, etc. but in many states the net is pretty wide, including bank employees and even animal control officers.
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Old 01-20-2019, 05:32 PM   #19
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Usually true medicaid planning involves the use of an irrevocable trust vs. a revocable trust. Yes, the 5 year window starts over again upon conversion.
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Old 01-20-2019, 07:48 PM   #20
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Usually true medicaid planning involves the use of an irrevocable trust vs. a revocable trust. Yes, the 5 year window starts over again upon conversion.
there are also medicaid compliant annuities for the community spouse. I can't really make any good advice beyond seeing an elder care lawyer. There our too many unknowns to guess what is right and this has to be done right.
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