Mom's dilemma

[LeatherneckPA]

Let's set the stage. My Dad died in February. Just the way he wanted to, quick and painless. Mom's PO'd. She was supposed to go first 'cause he knew all the money stuff. Now Mom is getting inundated with "limited time offers" for annuities and other garbage.

She's asking me for advice on what to do with to protect approximately $80k - $100k in CDs and over $150k in real estate to pass on to her sons instead of having some nursing home get it all.

My initial thought was "gift it" to her sons, a little each year. But I'm not sure I trust a couple of them not to tap into it before her demise.

So what can Mom do to protect her estate for her boys?

 

[youbet]

She's asking me for advice on what to do with to protect approximately $80k - $100k in CDs and over $150k in real estate to pass on to her sons instead of having some nursing home get it all.

IMO, nothing. Hiding wealth in order to qualify for welfare/charity has been made more difficult in recent years and the amount of dollars involved here probably doesn't justify a sophisticated estate plan.

If she gifts it to her sons now and lives beyond the look-back period, that would work. But, she actually has to give it to them and no longer have it. And, more importantly, she and you would have to be comfortable that any LTC she receives would be through Medicaid. In many states, Medicaid LTC means crappy LTC at a facility you would not choose if she was a private pay patient.

My knowledge on this is limited to some casual reading I've done for my MIL, so I'll be interested in what others have to say.

 

[Patrick]

Set up a revocable living trust naming you as successor trustee. Then she'll transfer all her assets into it. She has control while she's alive, then when she dies, you take over as trustee and distribute the estate according to her wishes. No probate this way.

She can also execute a living will spelling out what measures she wants (or doesn't want) taken to save her life (not to be indelicate, but this lets everyone know when to pull the plug).

 

[youbet]

Set up a revocable living trust naming you as successor trustee. Then she'll transfer all her assets into it. She has control while she's alive, then when she dies, you take over as trustee and distribute the estate according to her wishes. No probate this way.

She can also execute a living will spelling out what measures she wants (or doesn't want) taken to save her life (not to be indelicate, but this lets everyone know when to pull the plug).

The revocable living trust, at least in Illinois, doesn't hide the assets from the Medicaid folks in my understanding. Is that different by you?

I think OP is asking how to have Medicaid pay for nursing home costs despite mom having funds to pay for it herself, at least for a while.

 

[Gumby]

If she gives them the assets now, one possibility would be for the sons to fund a Long Term Care policy for a period equal to the Medicaid look-back period.

 

[Patrick]

The revocable living trust, at least in Illinois, doesn't hide the assets from the Medicaid folks in my understanding. Is that different by you?

I think OP is asking how to have Medicaid pay for nursing home costs despite mom having funds to pay for it herself, at least for a while.

No, it won't hide assets from legitimate creditors. I thought he was trying to keep it away from the annuity vultures and make sure the sons didn't piss it away.

The living will could prevent the bankrupting "Terri Schiavo" scenario.

 

[FIREd]

I agree with youbet. She should do nothing. Personally I pray I will not end up in a medicaid-subsidized facility in my old age. I intend to use my financial resources to stay out of such facility for as long as I can. My heirs can battle over what's left.

 

[SteveR]

Let's set the stage. My Dad died in February. Just the way he wanted to, quick and painless. Mom's PO'd. She was supposed to go first 'cause he knew all the money stuff. Now Mom is getting inundated with "limited time offers" for annuities and other garbage.

...My initial thought was "gift it" to her sons, a little each year. But I'm not sure I trust a couple of them not to tap into it before her demise.

So what can Mom do to protect her estate for her boys?

My Dad died at home at age 81. Mom found him on the floor one morning. She had to sell the house and move into an Assisted Living center. She also spend a few months in a Nursing Home. I was there with her everyday for over a month. I have other plans for my long term care. A nice overdose of a controlled substance would be my ticket to the Happy Hunting Ground.

Back to the topic.....I would not want to live in any Nursing home...much less while on any government assitance. My opinion would be to put Mom's stuff in some income generating accounts to keep her happy and healthy while she is still around. If there is anything left then you guys can fight over it. Mom comes first.

My Mom was raised during the Great Depression and to this day has a very hard time spending money on herself. I have to keep telling her she needs enjoy her Golden Years and splurge a little here and there. She spends very little and being blind and in an Assisted Living center without any place to spend it helps. At age 86 she is entitled to enjoy the rest of her life if she can. We kids are secondary at this point. If she leaves anything then so be it but I don't need it and have told her that many times.

 

[LeatherneckPA]

Hiding wealth in order to qualify for welfare/charity has been made more difficult in recent years and the amount of dollars involved here probably doesn't justify a sophisticated estate plan.

In today's world, I'd hardly consider a net worth of $250k or less to be "wealth". And I am not interested in "hiding" her assets to sponge off society.

Set up a revocable living trust naming you as successor trustee. Then she'll transfer all her assets into it. She has control while she's alive, then when she dies, you take over as trustee and distribute the estate according to her wishes. No probate this way. She can also execute a living will spelling out what measures she wants (or doesn't want) taken to save her life (not to be indelicate, but this lets everyone know when to pull the plug).

She's already got one of these, and in fact, I am the one left with the decision of when to pull the plug. Pretty easy actually, if she's in a condition I wouldn't want to be kept in then I am to grant her wish. Fortunately, I share her concerns in this area.

I think OP is asking how to have Medicaid pay for nursing home costs despite mom having funds to pay for it herself, at least for a while.

Nope, if she's got it I want to spend it to make her life pleasurable and comfortable. Her monthly income is only $700, but as someone else said, she doesn't spend a lot. We are becoming a cycnical society, when it is assumed our interest is in manipulating the system.

Last summer, when she was rehabbing after her amputations, she was in one of those Medicaid facilities. THAT WILL NEVER HAPPEN AGAIN!! I will move to FL myself to ensure that if need be. They don't treat, they just warehouse bodies for the morgue until they need refrigeration!!

No, it won't hide assets from legitimate creditors. I thought he was trying to keep it away from the annuity vultures and make sure the sons didn't piss it away.

LOL, she has no creditors! Hasn't for decades. Vultures, oh yeah, society is burdened by them in untold numbers. And unfortunately, I believe at least one of my brothers to be in that flock. On the plus side, I am the sole executor of the estate and the whatever you call it for the living will.

 

[Bestwifeever]

Nope, if she's got it I want to spend it to make her life pleasurable and comfortable. Her monthly income is only $700, but as someone else said, she doesn't spend a lot. We are becoming a cycnical society, when it is assumed our interest is in manipulating the system.

Last summer, when she was rehabbing after her amputations, she was in one of those Medicaid facilities. THAT WILL NEVER HAPPEN AGAIN!! I will move to FL myself to ensure that if need be. They don't treat, they just warehouse bodies for the morgue until they need refrigeration!

Well, your original post does say:

She's asking me for advice on what to do with to protect approximately $80k - $100k in CDs and over $150k in real estate to pass on to her sons instead of having some nursing home get it all.

so I can see why people assumed you wanted advice on how to protect her money "instead of having some nursing home get it all."

 

[youbet]

LeatherneckPA.....

My apologies if I misinterpreted your post, but as Bestwifeever pointed out you did say " She's asking me for advice on what to do with to protect approximately $80k - $100k in CDs and over $150k in real estate to pass on to her sons instead of having some nursing home get it all."

I'm not really sure what your question is now...... Perhaps you could try it again.

youbet

 

[ERD50]

I'm not really sure what your question is now......

Well, my reading was the same as youbet and bestwifeever. Not sure how else to take it....


-ERD50

 

[retiringby50]

I have other plans for my long term care. A nice overdose of a controlled substance would be my ticket to the Happy Hunting Ground.

Both Mom and Dad had to spend time in a nursing facility (mom died there - she had been in a coma and was sent there, while Dad went there to recuperate). Mom was paid by insurance, and Dad was paid by Medicare - both weren't terrible situations, but we visited all the time.

Back to Steve, my dad used to say that too, but I would remind him, "Dad, you might find yourself in that situation but can't do anything about it!"

Me? I'm just in denial and hope that LTC will be MUCH improved when I need it.

 

[2B]

There's a big difference between Medicare and Medicaid. Medicare will cover a limited stay in a facility for "rehabilitation." Long term residents either need to pay (~$6,000/mo in Houston) or get the honor of Medicaid.

In Medicaid any assets will go to the government. The Medicaid won't kick in until any assets are depleted.

LeatherneckPA, you didn't say what her income from other sources are (SS, pension, etc). $250,000 will cover a couple of years in full blown nursing care and maybe 4 years in assisted living ($~3,500/mo in Houston). Factoring in any income will estend the coverage period. My personal plan only has $300,000 (inflation adjusted) held in safe reserve for possible LTC. It's supplemented with anticipated SS. I'm counting on 5 years or less in LTC.

My MIL lasted almost 2 1/2 years in nursing care. My FIL is now in a memory care unit. He had been in assisted for about 1 1/2 years. Between the pensions and SS they burned assets for awhile but now with only him the money crunch is minor.

A good facility is better for your mother than for you to try to do it on your own -- IMHO. I know there are a number of people here who did care for their parent until the end. I don't think I could personally take the stress but I also think that the amount of care they get from the "professionals" is better than just relying on me/DW.

What you need to do NOW is get here POA and living will in order. If she really wants protection, she can assign a POA to take over her financial affairs immediately. You and your siblings could manage her assets in trust for her. Vanguard has my FIL's account that my wife manages. She then wouldn't have any money to be ripped off by sleeze ball salespeople.

 

[Art G]

Let's set the stage. My Dad died in February. Just the way he wanted to, quick and painless. Mom's PO'd. She was supposed to go first 'cause he knew all the money stuff. Now Mom is getting inundated with "limited time offers" for annuities and other garbage.

She's asking me for advice on what to do with to protect approximately $80k - $100k in CDs and over $150k in real estate to pass on to her sons instead of having some nursing home get it all.

My initial thought was "gift it" to her sons, a little each year. But I'm not sure I trust a couple of them not to tap into it before her demise.

So what can Mom do to protect her estate for her boys?

There is a lot to factor in here. First off, I wouldn't suggest gifting the money now. Obviously, the CD isn't going to be a concern in regard to long term capital gain, but the house may be. It doesn't sound as if estate taxes will be an issue, but by gifting the real estate to the kids, what type of tax effect will it have on them?
I've heard the story many times of the senior who was from the Depression Era and didn't like spending the money, but in truth, the concern stems back to their fear of running out of money before they're gone.
I'd suggest sitting down with Mom and determining how much her "nut" is each month, then go from there. I'd guess that the CD isn't providing enough income for her and she may need to move some things. I don't know what the maturity is on the CD, but many have a death put feature, so early withdrawal may not be a problem.
Many more thoughts come to mind, but without more information, it's pretty tough to make suggestions.