Need Advice On Managing My Mother's Money

[Ed B]

I have mentioned my mother's situation on one or two other threads. In a nutshell she had an aggressive back surgery in March 2016 that was badly botched. She lost the use of her left leg, suffered staph infections, and went into decline resulting in a feeding tube for a few months to keep her from starving to death. She nearly passing away three times. She has been in a skilled nursing facility since June 2016 with Medicare paying the first 100 days and private pay for most of the remainder. The team of physicians treating her told us she would not recover and the internists suggested hospice. We sold Mom's home to help keep her in a private room as long as possible.

The good news is she has gaining use of her left leg, is eating with the feeding tube and is now walking short distances with a walker. Four months ago it took two people "max assist" to move her from the bed to the wheel chair, from wheel chair to potty, and back. Now she transfers herself with no assistance. She is ready to graduate from skilled nursing to assisted living.

So here is where I need advice. Her income consists of ~$2550 per month from a modest pension and social security. The cost of the Assisted Living apartment, including things like laundry service, three meals a day, snacks, cable TV, activities and assistance (as needed) from nurse techs and nurses is slightly under $3400 per month. So we need about $900/month or $10800 per year from her assets to cover the cost.

She has $119,000 in liquid assets between her checking account and two savings accounts. None of which are earning anything worth mentioning.

I am considering taking $100k of her money and putting it into something like the Vanguard Wellsely or Wellington fund so she can get some kind of return. My thought is that the $19,000 we keep in her checking will cover her expenses for a year and a half (she moves into the assisted living apartment June this year). Then, starting January 2019 and each January thereafter we take out what we need for that year to cover her expenses. Rinse and repeat until her fund is depleted.

If we keep her money where it is she has enough, on paper, to pay for her assisted living for about 11 years. I am hoping to stretch that out even further, or if she recovers enough to move out on her own completely, to have a little more for her to use however she wishes.

Is the risk of investing in a fund like these outweighed by returns that should make her money last a couple of years longer? I know we will have to sell shares of the fund by year three to pay her yearly expenses, since the average returns from these funds produce about 4.5%. But 4.5% is far better than what she gets today.

Thanks in advance.

 

[Texas Proud]

I will ask why the people who botched the operation are not paying for this expense?

I mean, if it were really 'botched' then they did something wrong and should be held liable.... for all expenses that you have paid so far and any needed going forward...

As for the money, i agree that you need to keep a couple of years worth of money set aside and invest the rest conservatively like you mentioned... no need to take a big risk on any of it...

 

[Ed B]

I will ask why the people who botched the operation are not paying for this expense?

I mean, if it were really 'botched' then they did something wrong and should be held liable.... for all expenses that you have paid so far and any needed going forward...

As for the money, i agree that you need to keep a couple of years worth of money set aside and invest the rest conservatively like you mentioned... no need to take a big risk on any of it...

We have had discussions about liability and probably should have. What went wrong is that when the surgeon straightened or re-aligned her back, existing bone spurs on one or some of the vertebrae in the lower back severely damaged the nerve controls function in the left leg. She complained of severe pain and loss mobility as soon as the anesthesia wore off. The surgeon thought she was being a drama queen and fussed at her to get out of bed and start working with the staff to walk and recover.

After several days he realized something truly was wrong, so they operated again to remove the bone spurs and releave the nerve. Well, they further injured the nerve and a staph infection was introduced. It got worse from there. My mother, my siblings and I were keen on the idea and were going to start looking for the right attorney. In the mean time the surgeon had a severe stroke and is out of practice and dealing with his own disability. We have dropped it for now. My mother doesn't want to pile on and I kind of agree, but we have more time get an attorney involved.

 

[Z3Dreamer]

Found money story. When Mom was in a skilled nursing facility, I was in the same situation as you. Independently, I went to a free seminar offered by a law firm that does elder care, trusts, wills, etc. They mentioned a program called "Aid and Attendance" that will help those who served during periods of war. It is also known as the VA's best kept secret. Mom had served as a typist/telegraph person in the early 50's. If your mom served during a period of war reply and I will tell you more. I was told she didn't qualify because: 1) she was not in battle 2) her income was too high 3) she was not wounded, but eventually we persevered and eventually started receiving $1,900 per month. Would that help?

 

[RunningBum]

Back to the original question, you don't say here how old your mother is and what her odds are on living more than 11 years but I assume they are good enough to be concerned. I agree that outliving her money is a risk worth balancing against a market drop, and those 2 funds usually don't take that much of a hit in a downturn. Sounds like a good idea to me.

 

[Meadbh]

What a sad outcome!

As a (retired) physician, the story as you tell it sounds as if negligence is a possibility, though not a certainty. I recommend you consult with a lawyer with experience in medical malpractice. It's okay to feel sympathy for the surgeon, but he has or had professional liability insurance. If negligence is proven, your mother deserves a financial settlement.

 

[Ed B]

Found money story. When Mom was in a skilled nursing facility, I was in the same situation as you. Independently, I went to a free seminar offered by a law firm that does elder care, trusts, wills, etc. They mentioned a program called "Aid and Attendance" that will help those who served during periods of war. It is also known as the VA's best kept secret. Mom had served as a typist/telegraph person in the early 50's. If your mom served during a period of war reply and I will tell you more. I was told she didn't qualify because: 1) she was not in battle 2) her income was too high 3) she was not wounded, but eventually we persevered and eventually started receiving $1,900 per month. Would that help?

$1900 a month would help, but my mother is not a veteran. Thanks for the suggestion.

 

[Likes_to_Lurk]

If your mother was married to a veteran, she may qualify for benefits called aid and attendance. Check with the assisted living business office. They deal with this all the time and can give you some guidance.

 

[Ed B]

Back to the original question, you don't say here how old your mother is and what her odds are on living more than 11 years but I assume they are good enough to be concerned. I agree that outliving her money is a risk worth balancing against a market drop, and those 2 funds usually don't take that much of a hit in a downturn. Sounds like a good idea to me.

My mother is 75. The women in her family tree lived to their early 80's (80 - 83) and it didn't matter if they were extremely heavy or slinder their whole life. If mother makes it to 85 she will have set a family record by a year or two. It is certainly possible that she will live more than 11 years, although she doesn't believe she will.

The biggest risks in the near term are failure to thrive (she has had a feeding peg inserted twice during this ordeal) and future staff infections. Our long time family back surgeon (yes, back problems are an unfortunate family trait) who referred us to the other guy and who has been examining her since, said she is not a candidate for any surgery except in the most dire circumstances because of her recent history with staph. It is under controll but he said if they open her up for her back or hip, it will come raging back.

I don't understand staph infections well enough to know if that is localized to the area of previous surgeries or if it applies in general.

 

[Ed B]

What a sad outcome!

As a (retired) physician, the story as you tell it sounds as if negligence is a possibility, though not a certainty. I recommend you consult with a lawyer with experience in medical malpractice. It's okay to feel sympathy for the surgeon, but he has or had professional liability insurance. If negligence is proven, your mother deserves a financial settlement.

I think this is the right thing to do. Our family has been generally morally averse to lawsuits. I don't want an ambulance chaser but i will ask for a referral from some attorney friends of mine.

Thanks for the advice.

 

[Ed B]

If your mother was married to a veteran, she may qualify for benefits called aid and attendance. Check with the assisted living business office. They deal with this all the time and can give you some guidance.

My father was not a veteran either. He just barely missed the draft for the Vietnam War because of various family related exemptions.

 

[2017ish]

I think this is the right thing to do. Our family has been generally morally averse to lawsuits. I don't want an ambulance chaser but i will ask for a referral from some attorney friends of mine.

Thanks for the advice.

Don't delay too long. Good malpractice lawyers will need to obtain the medical records, consult medical expert(s), and determine if there is a claim and if it is worth pursuing. (You don't want an inexperienced lawyer in this field!) Texas apparently has a 2 year limitations period from the date of the incident--after which suits are barred if not already initiated.

(I did a quick check after seeing your dates, because we have a 1 year limitations period here....)

Best wishes for your mom.

 

[Ed B]

Don't delay too long. Good malpractice lawyers will need to obtain the medical records, consult medical expert(s), and determine if there is a claim and if it is worth pursuing. (You don't want an inexperienced lawyer in this field!) Texas apparently has a 2 year limitations period from the date of the incident--after which suits are barred if not already initiated.

(I did a quick check after seeing your dates, because we have a 1 year limitations period here....)

Best wishes for your mom.

Thank you

 

[nun]

As your mother is 75 you should plan for at least 10 years IMHO. I think Wellington would be a good place for your mother's money, but I'd probably keep around 3 years spending in bank account/CD/I-bonds to give you and her a bit of a buffer (also bearing in mind that the average stay in assisted living is around 2 years).

This tread brings up the issue of long term care insurance becoming increasingly expensive for falling levels of coverage so that lots of people end up in the OP's mother's situation. Many companies are simply pulling out of the market. A few years ago I got a letter from my LTC insurer (Met-Life) saying that they
were pulling out of the market, but that they would continue to cover existing policy holders. My LTC covers up to $200/day and has a lifetime cap of $300k so if I need that in 20 years, when I'm in my 70s, it will probably only last for a couple of years.

 

[meierlde]

Found money story. When Mom was in a skilled nursing facility, I was in the same situation as you. Independently, I went to a free seminar offered by a law firm that does elder care, trusts, wills, etc. They mentioned a program called "Aid and Attendance" that will help those who served during periods of war. It is also known as the VA's best kept secret. Mom had served as a typist/telegraph person in the early 50's. If your mom served during a period of war reply and I will tell you more. I was told she didn't qualify because: 1) she was not in battle 2) her income was too high 3) she was not wounded, but eventually we persevered and eventually started receiving $1,900 per month. Would that help?

Did find out about this when an aunt needed to be in a nursing home, she was on medicaid but really then the issue was which pocket of the federal government would pay? (My aunt was a nurse in WWII, which meant she qualified I think she served in Italy for a while as we have some snapshots from Rome)

 

[pb4uski]

With respect to your original question, I would do exactly as you were thinking... leave $19k in savings and put $100k in Wellesley. Or better yet, leave $4k in savings, put $115k in Wellesley and then set up a $1k/month automatic redemption that goes to savings to replenish it.

We did something very similar for BIL's mom and it has worked like a charm.

 

[Newventurer]

So sorry to hear about your mom's condition, in my mom's case her health is fine but she struggles with dementia, and is aware of it. My mom is in assisted living and is getting along fine in that environment - friendships, meals, they give her her meds, and she has some independence to walk around the facility.

My mom has LTC, thank goodness, which pays $3000 to the Assited Living care facility, though it is reimbursed by LTC after the fact, so we had to prime the pump with two months payment up front to stay ahead. The additional (now) $780 per month I have debited directly out of her bank account to the Assited Living facility. I just got the notice that they increased the fee by 4.4% as they did last year, and probably will continue to do. So depending on you mom's outlook, I would say that you may need to take some risk in managing the funds to at least try and stay ahead of inflation (actually more than inflation).

I hope you find a facility you and she are happy with. Residents who have active family members involved in the care of their loved one get more attention so let them know who you are and when you are on site. Ask employees specifically about your mom, do they know her, can they tell you how she is doing. We find out more through this informal interaction with the staff than any where else. We also give small gifts to the staff 'from mom' as allowed by the facility rules, to each member of the staff as Recognition for their efforts.

 

[imoldernu]

A very difficult situation. Living in the regular house part of our 5 tier CCRC, we get to see many different situations and just as many different approaches. So difficult to see the future. Forces us to look at possibilities and statistical odds, even though this is not easy.

Assisted living @ $40K to 50K/yr is one thing, same facility nursing home care (if needed) may be $80K+, and perhaps plus a lot more. We've lived here long enough to see people with widely different assets... some of whom have gone from assisted living to nursing home care, being able to afford the cost, but others who began in assisted living but had to move to nursing home care, were not able to afford our facility, and had to be moved to a different, less expensive home. This is not easy... for the patient or the family. When the change occurs, the upset can be very traumatic, and for the family, with limited time to decide often faces hard choices.

On the other side, families who have spent the time and effort to find the "right" less expensive facility have been able to make the transition early, with less upset, and avoiding the cultural shock of being isolated in a strange environment.

The search for the right home can take a very long time, making personal visits and balancing distance, cost, social compatibility and care level.

A crystal ball, to see future health requirements would be great. Instead, a realistic look at what might occur in the future could well be as important as the plans to pay for the neartime care.

Possibly the hardest decision one has to make for the care of a loved one.

 

[Ed B]

....

I hope you find a facility you and she are happy with. Residents who have active family members involved in the care of their loved one get more attention so let them know who you are and when you are on site. Ask employees specifically about your mom, do they know her, can they tell you how she is doing. We find out more through this informal interaction with the staff than any where else. We also give small gifts to the staff 'from mom' as allowed by the facility rules, to each member of the staff as Recognition for their efforts.

My DW's sainted grandmother taught us this many years ago when her husband, DW'S grandfather, ended up bedridden in a nursing home due to complications from advanced Parkinsons disease and a stroke. For about 8 years she would go see him a couple of times a day at unpredictable times, engage with the staff, bring homemade cookies often and gave gifts at Christmas and occasionally other times.

We have done similar things while my mother has been in skilled nursing facilities. But even so, we had to get her out one in which they were letting her starve to death. We were watching her rapidly decline and expressed concern about dehydration, constant UTI's, continued weight loss, vomiting, no appetite and the weekend staff was uninterested.

I told them that their staff doctor can arrange transport to the hospital of my choice or I would take her without their referral. I contacted that family back surgeon I mentioned earlier and he had an internist and a hospital bed ready and waiting for us at one of the better hospitals in our area. I finally got the nursing home staff doctor to order the transport. Suddenly the disinterested weekend staff was jumping around wide-eyed.

When we got to hospital she was severely malnourished, severely dehydrated, was suffering acute renal failure, and the Internist and intensive care staff were preparing us for a bad outcome. A week later she had a feeding tube but not before they pulled me aside and said the merciful thing would be hospice....but it was our decision, of course.

We moved her to a different Skilled Nursing Facility and I had a very straightforward, blunt, but professional discussion with the administrator at the previous one. I named names both for the excellent staff and the ones that said things like "she aint my patient" while turning off the call light and walking out....in front of us.

Without active family advocates I don't know how some residents get by. No matter how hard admistrators try to hire the best and weed out the bad actors, every nurse tech out there knows the correct answers when being interviewed for the job.