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Old 12-21-2007, 12:00 PM   #41
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Originally Posted by maddythebeagle View Post
...and frankly, I think there are different levels of homes and going in as an indigent might not be the most desirable just so your kids can squander your hard earned money....
Originally Posted by travelover View Post
Although from what I've seen of Medicaid nursing homes, they will get their just reward in the end.
I suspect that the family dynamics have a big influence on the way this plays out. It's also too chancy to leave the result up to the Medicaid program and the home-care staff. Who wants to go through a search for a new facility every few years?!?

Deeding away the house, no matter how well one expects that to work out, means that you've effectively abdicated control of it. Good luck with that. Even the most trusted kid can be divorced, sued, bankrupt, unexpectedly dies, or (for the best of reasons!) puts their personal list of priorities over yours. Sure, there are legal maneuvers to guard against these catastrophes-- is that really worth the putative tax savings?

Or even worse, your beneficiary puts your best interests over your preferences. ("Sorry about this, Dad, but we know it's best for you.")
If you want to have more money in your pocket, then buy a small-cap value stock or a basket of commodities. If you want to screw the govt out of tax money then donate to charity and take a tax deduction. The financial result may be about the same, but you won't be homeless in the bargain.

Originally Posted by retiringby50 View Post
Although in good health, he had a way of threatening to do things... "you didn't go to the grocery store for me like I asked; you're going to inherit everything, you know. You should at least listen to me!" or "You're just waiting for me to die! I should give the house to someone else!" Then he got remarried! And later divorced! You get the picture. I knew it was not a wise financial decision but did it anyway "just in case." My dad had gotten married again in hopes of having a male heir. :confused:
Having been in this relationship dynamic for a couple decades, including nearly six years of landlording for my PILs tenancy, I would advise against mingling family & funds. I used to think it was a good idea when based on mutual trust and familial respect, but now I'm dead-set against it. You'll be left with one or the other-- and perhaps neither-- but never both. Even Mother Theresa & Mr. Rogers would bicker between themselves over this type of relationship.

In our case one step at a time, with the best of intentions, we all willingly ended up in a relationship that shifted from a basis of family & grandkids to one that was based upon money and emotional blackmail. No dysfunctional explosions ensued-- however the festering issues (formerly avoided by distance) quietly poisoned not only the intergenerational ohana but also our own spousal and child-raising relationships. They taught their only grandkid a lot, perhaps more than they intended. Maybe the PILs even stressed their own marriage by their actions, although I ain't takin' the blame for that. The PIL's eventual decision to restore the 5000 miles between us (by this point no longer for everyone's benefit but for their own selfish reasons) was a huge relief. Even 10 months later my spouse and I nudge each other and say "Hey, it's ___day and we don't have to _____ with them!" or "Golly, we just did ___, we didn't have to coordinate with them, and we still have the rest of the day to do whatever we want!" and "Gosh, we don't have to explain to a teenager what Grandma & Grandpa meant by that remark!!"

BTW PILs selling their home into a rising market and then buying back into that market six years later downsized them from a 4BR single-family home on an acre lot to a 2BR condo in a complex-- and cost them at least another $350K to inflation and missed appreciation. It cost spouse and I nearly six figures in below-market rent for what turned out to be not exactly the world's best tenants after all. (Even today I'm still pissed off about the last 10 months of sweat equity that I've poured into that house and its yardwork.) And of course the damage to family relationships-- priceless!!

Bless them for being the kind of people they are, I hope my PILs die with millions. My spouse hopes that they give it all to her brother and his spouse so that they can ER too. We really hope that PILs don't inflict it on their only grandchild (not that we have any influence on the decision), and if for some surprising reason my spouse inherits someday then she's gonna think long & hard about charity or 529s for future generations before she gives it to our kid. We don't need, let alone want, that kind of money in our lives.

But if you insist that you wanna do something nice for your kids/grandkids-- write them a check and kiss it goodbye. Much better and much cheaper, both fiscally and emotionally.

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on "The Military Guide to Financial Independence and Retirement."

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Old 12-21-2007, 03:27 PM   #42
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Originally Posted by travelover View Post
The interface with the lawyer that I referred to was about 15 years ago, prior to current laws about look-back (which were passed to stop this practice). He was clearly advising to pass on the small estate to other family members immediately, so Medicaid would pay for the nursing home expenses. You may not consider this advice unethical or immoral, but I do.

Re the quality of Medicaid nursing homes, my anecdotal experience is that if you get into a good one with private pay you may stay on via Medicaid once your funds run out. If you try to enter one on Medicaid, you may well be refused. Again, just my observation.
Yes, I would not consider his advice unethical or immoral if the practice he recommended was one that was permitted by existing rules, back then. I think we've debated this issue before so I'll refrain from additional comment.

Re the quality of Medicaid nursing homes: the conventional wisdom has been to get the best skilled nursing home while you're privately paying and and let Medicaid take over when you run out of funds -- and yes, the nursing home would be hard pressed to kick you out. If a nursing home discriminates in admitting medicaid recipents, it is exposing itself to potential licensure problems as well as a violation of several Federal and State anti-discrimination provisions.
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