Assisted living for parents

[Tetto]

Hi All,

I'm in need of a little advice. My parents have hit the point in their life where they need to move into an assisted living facility. I've been doing virtually everything for them with little to no help from my two brothers thus far (i also hired a retired CNA to help me- she's golden). The place we've chose is in their hometown, ten minutes from their house.

I will be selling their house once the dust settles. My question centers on what to do with the proceeds on that house? Put it in the bank? They have other cash to live on, and between pension and SS, they take in about $5K/month. This will pay the lions share of their monthly charge at the facility. I'll have to kick in probably $500 to $800 extra a month to cover everything. That money comes from an account holding approx $225K. Their house is in a very desirable area in Connecticut and should fetch north of $500K, I think. I will need an appraisal to understand where we are there though.

TIA for any advice

Tetto

 

[njhowie]

I've gone through similar since the beginning of the year with my mom. We had her in assisted living from mid-Feb to mid-May near us. That turned out to be more than she needed and we just moved her to a life plan community where she is in independent living, but they also have assisted living and additional facilities and services should she need it in the future.

Her FL condo is currently in escrow and expected to close by the end of this month. I drove her car back from FL last week, and after cleaning it up it goes to Carvana for quick sale.

Once the dust settles, I'm probably going to leave 2 years worth of expenses in the savings account earning almost nothing (currently there's about 4 years worth). The new money coming from the condo and car I'll move to her Fidelity account and put in to a Treasury/CD ladder.

Mom's Fidelity accounts had been massively overloaded with oil stocks for decades. YTD I've been slowly selling them all as they've gone wild. I'm truly thankful for what's happened with them, as it takes a lot of pressure off considering where they were just a year or two ago. Proceeds have been going to short/medium term Treasuries/CDs/munis. She still has a nice bit of those oil stocks, which I'll continue selling off if/as they continue higher. But, the anxiety is no longer there should they fall back down to prior levels.

I think you want to position your parents holdings similarly...have some level of no-risk money that you're comfortable with, that is really cash and can be pulled by ACH/EFT. The amount of yield/return should be of no concern, the objective is that it is instantly accessible, and will never lose value. Also, you're not going to want to be doing the work monthly - set up autopay with the assisted living facility and forget about it. Then, you'll want some level of "almost cash, but not really" - Treasuries/CDs. That will get you some returns on the money...which will likely eventually move over to the no-risk/cash account. The remainder, maybe 50% of the total, I believe you'll want to position with a more traditional AA of whatever you're comfortable with.

As far as selling the house. My one recommendation is that you not hold out for top dollar, and be flexible. List it fairly, relative to what else is on the market in the area, and be flexible in considering any offers. Don't try to nickel and dime the real estate agent on their commission - you want them working for you and giving the extra effort to get yours sold. Your objective is to sell the house...and as quickly as possible, in my view. You don't want the house sitting there racking up on-going expenses while not getting any use/value out of it. So, maybe you receive an offer of $5k or $10k under list price - don't immediately write it off as unacceptable. Selling at that price now will likely prove to be a better option than letting it sit and having the listing age and the real estate market potentially heading lower with rising interest rates and a growing bubble.

Also, check with the assisted living facility...in many states, if you are in the facility and for some reason you run out of money by no doing of your own, they cannot kick you out. So as long as you have a sound financial plan and have been paying the facility for a few years, you need not worry that if the money runs out should they live a long time with increasing living costs that they'll be forced out.

In any case, I can truly appreciate what you're going through. It's not easy. However, once you do get them settled, and things stabilize, you'll all be happier and less stressed.

 

[MichaelB]

This sounds a bit line my DM’s situation. When she moved into an assisted living 6 years ago her pension income covered most of her living expenses. This is no longer the case. The ALF costs have risen steadily at about 2x the CPI, and her need for additional support - charged separately - has also grown. Now she needs to withdraw about 10% of her portfolio to cover the additional cost.

In our case it’s important that the portfolio at least keep pace with her inflation, and this means some funds invested in equities. She has about 30% invested in equities and the rest in bond funds and cash. It’s down a bit this year but over the past 6 years her portfolio has grown faster than her cost of living, so she can finance her own support. There is absolutely no doubt that the choice to live in an assisted living facility has extended her life, and also no doubt the costs to keep her comfortable have risen very quickly.

 

[Tetto]

Fully agree on the house sale. My Dad built the house 51 years ago, so the cost basis is pretty low. I wont give it away, but I'll not be ridiculous about it either. Thanks!

I've gone through similar since the beginning of the year with my mom. We had her in assisted living from mid-Feb to mid-May near us. That turned out to be more than she needed and we just moved her to a life plan community where she is in independent living, but they also have assisted living and additional facilities and services should she need it in the future.

Her FL condo is currently in escrow and expected to close by the end of this month. I drove her car back from FL last week, and after cleaning it up it goes to Carvana for quick sale.

Once the dust settles, I'm probably going to leave 2 years worth of expenses in the savings account earning almost nothing (currently there's about 4 years worth). The new money coming from the condo and car I'll move to her Fidelity account and put in to a Treasury/CD ladder.

Mom's Fidelity accounts had been massively overloaded with oil stocks for decades. YTD I've been slowly selling them all as they've gone wild. I'm truly thankful for what's happened with them, as it takes a lot of pressure off considering where they were just a year or two ago. Proceeds have been going to short/medium term Treasuries/CDs/munis. She still has a nice bit of those oil stocks, which I'll continue selling off if/as they continue higher. But, the anxiety is no longer there should they fall back down to prior levels.

I think you want to position your parents holdings similarly...have some level of no-risk money that you're comfortable with, that is really cash and can be pulled by ACH/EFT. The amount of yield/return should be of no concern, the objective is that it is instantly accessible, and will never lose value. Also, you're not going to want to be doing the work monthly - set up autopay with the assisted living facility and forget about it. Then, you'll want some level of "almost cash, but not really" - Treasuries/CDs. That will get you some returns on the money...which will likely eventually move over to the no-risk/cash account. The remainder, maybe 50% of the total, I believe you'll want to position with a more traditional AA of whatever you're comfortable with.

As far as selling the house. My one recommendation is that you not hold out for top dollar, and be flexible. List it fairly, relative to what else is on the market in the area, and be flexible in considering any offers. Don't try to nickel and dime the real estate agent on their commission - you want them working for you and giving the extra effort to get yours sold. Your objective is to sell the house...and as quickly as possible, in my view. You don't want the house sitting there racking up on-going expenses while not getting any use/value out of it. So, maybe you receive an offer of $5k or $10k under list price - don't immediately write it off as unacceptable. Selling at that price now will likely prove to be a better option than letting it sit and having the listing age and the real estate market potentially heading lower with rising interest rates and a growing bubble.

Also, check with the assisted living facility...in many states, if you are in the facility and for some reason you run out of money by no doing of your own, they cannot kick you out. So as long as you have a sound financial plan and have been paying the facility for a few years, you need not worry that if the money runs out should they live a long time with increasing living costs that they'll be forced out.

In any case, I can truly appreciate what you're going through. It's not easy. However, once you do get them settled, and things stabilize, you'll all be happier and less stressed.

 

[Aerides]

This thread is a good reminder for everyone to make these plans themselves, while they can, and not put the burden on their children.

I have a friend, mid-50's. A years back her father passed. Her mother (mid-80's) has withered significantly since then, and my friend is basically now her full time care giver. They have nursing help on site daily as well, and finances are well covered. Assisted living was never seen as an option for various personal reasons, but friend is now really feeling trapped. She loves her mom of course, but it's not a situation either would have signed up for. The mother is lucid and knows she's a burden, and there's a sadness between them now that didn't have to be there.

Retirement planning is far more than finances.

 

[ivinsfan]

njhowie I thought I've seen on other threads that assisted living is treated differently then living in an actual nursing home. I mean in regards to getting payment assistance if you run out of money.


OP when you think about expenses It's possible your folks, if they go a nursing could increase their monthly costs by multiples up to a multiple of 4 or 5 if they both end up in full care. Since they still have good assets and you are at the beginning I think a few of their dollars spent with an elder care attorney would be helpful. They can give you guidelines as to what you should do to protect them and yourself going forward.

 

[Sunset]

Fully agree on the house sale. My Dad built the house 51 years ago, so the cost basis is pretty low. I wont give it away, but I'll not be ridiculous about it either. Thanks!

Remember the first $500K of gain (after expenses + basis) is tax free (pretty sure), but you may still have a gain and some taxes to pay out of the sale.

Are you sure they are accepted at the assisted living already ? I know when we were looking, there were assessments and income qualifications. You have the income covered, but the assessments could be an issue, they were for us.

 

[Tetto]

Remember the first $500K of gain (after expenses + basis) is tax free (pretty sure), but you may still have a gain and some taxes to pay out of the sale.

Are you sure they are accepted at the assisted living already ? I know when we were looking, there were assessments and income qualifications. You have the income covered, but the assessments could be an issue, they were for us.

The assessment is this Thursday, which frankly scares me a bit. My mother has dementia that has accelerated recently but my father basically keeps her in line. I do not think she'll be able to pass a memory test if they administer it. Its definitely got me worried

 

[ivinsfan]

The assessment is this Thursday, which frankly scares me a bit. My mother has dementia that has accelerated recently but my father basically keeps her in line. I do not think she'll be able to pass a memory test if they administer it. Its definitely got me worried

I hear you but if her issue is major they will find out soon enough and then you have more problems. Have you picked a place that both nursing home and assisted living on site? That might be the way to go for future continuity.

 

[wolf]

Selling the house. May result in big capital gain tax.

Random thoughts:

1. Rent the house. If house is paid for. Rents will help pay Parents expenses.

2. Depending on tax laws. Children inherit house at market value.
Step up in basis.

3. Lots of posts on: Power of trust. Trust. (who is Trustee), etc.

4. If you sell the house. Conservative approach. CD's are finally paying fairly good rates.

Good luck. In same situation now.

 

[Bamaman]

You are thinking straight about the assisted living.

In the MidSouth, our assisted living places run $2100-2400 a month. Full nursing home care is $7,000 monthly.

My mother was in a CCRC with 24/7 help watching her. When she was down to her last $5,000 cash, she passed. We were about to have to mortgage her lake house to pay for her luxury life my sister demanded she be in. Many are just as happy in a nice assisted living home.

 

[ivinsfan]

You are thinking straight about the assisted living.

In the MidSouth, our assisted living places run $2100-2400 a month. Full nursing home care is $7,000 monthly.

My mother was in a CCRC with 24/7 help watching her. When she was down to her last $5,000 cash, she passed. We were about to have to mortgage her lake house to pay for her luxury life my sister demanded she be in. Many are just as happy in a nice assisted living home.

For each person correct.. so depending on area 4800 to 14k a month

 

[OldShooter]

@tetto, your state almost certainly has something that might be called the "Senior Assistance Line," "Senior Resouces," etc. They will have people (free) who know the whole landscape of rules and resources. They should be able to answer your questions accurately including the state rules spin, and may point you to resources that you didn't know exist. Years ago, DW was vice chair of our state's seniors board and the things they had and did were amazing. As it turns out, there is lots of federal money channeled through these state organizations. Meals on Wheels, for example.

 

[Teacher Terry]

Some nursing homes won’t kick you out once you run out of money after you self pay for a period of time. They give you a Medicaid bed. Once you can’t pay a assisted living facility you are out. I think the two are being confused. Locally AL facilities won’t accept you if you have dementia. 4 months ago I helped my friend find a good one. Ours start at 4300/month for a studio and go up to 8k depending on how much care you need.

 

[njhowie]

njhowie I thought I've seen on other threads that assisted living is treated differently then living in an actual nursing home. I mean in regards to getting payment assistance if you run out of money.

The assisted living facility mom was at is a participant in New Jersey's Managed Long Term Services and Support (MLTSS) Program for Assisted Living. They made very clear that should she run out of money down the road, her expenses going forward would be covered and she would not be evicted. They did have the right to move her out of her private studio apartment to a shared one, but that is certainly understandable.

https://www.nj.gov/humanservices/dmahs/home/mltss.html

 

[ivinsfan]

The assisted living facility mom was at is a participant in New Jersey's Managed Long Term Services and Support (MLTSS) Program for Assisted Living. They made very clear that should she run out of money down the road, her expenses going forward would be covered and she would not be evicted. They did have the right to move her out of her private studio apartment to a shared one, but that is certainly understandable.

https://www.nj.gov/humanservices/dmahs/home/mltss.html

So some states might be different that would be a good reason to consult an eldercare lawyer.

 

[Dash man]

Many Assisted Living homes also have memory care in a separate floor or wing. My MIL was in one and a retirement home my church is affiliated with has independent and assisted living, and soon will open their memory care unit.

 

[ivinsfan]

In our area most facilities have Senior living(regular apartments) AL, and full nursing home and memory care on the same campus..not all but most.

 

[Tetto]

Many Assisted Living homes also have memory care in a separate floor or wing. My MIL was in one and a retirement home my church is affiliated with has independent and assisted living, and soon will open their memory care unit.

This facility we are looking at has a memory care wing on the first floor. It’s all self contained on-site.

 

[target2019]

Hi All,

I'm in need of a little advice. My parents have hit the point in their life where they need to move into an assisted living facility. I've been doing virtually everything for them with little to no help from my two brothers thus far (i also hired a retired CNA to help me- she's golden). The place we've chose is in their hometown, ten minutes from their house.

I will be selling their house once the dust settles. My question centers on what to do with the proceeds on that house? Put it in the bank? They have other cash to live on, and between pension and SS, they take in about $5K/month. This will pay the lions share of their monthly charge at the facility. I'll have to kick in probably $500 to $800 extra a month to cover everything. That money comes from an account holding approx $225K. Their house is in a very desirable area in Connecticut and should fetch north of $500K, I think. I will need an appraisal to understand where we are there though.

TIA for any advice

Tetto

For spouse's parents, here is a summary of what transpired.

In 2006 they asked me for help with investing and finances (about $250K invested), which I did until EOY 2018. About 2008 my wife began paying bills for their housing expenses. By 2011 my F-I-L could not cope with wife's dementia and erratic behavior. By the end of 2011 they moved from home to independent living (location I found) which was covered 100% by their SS and pension income. In 2012 their home was sold, for about $125K. About that time my wife became a joint holder of the checking account. In 2015 F-I-L moved to a 1 bdr, and she moved to assisted living. Their LTC policies started getting tapped (a great choice by M-I-L in her earlier years). He died 2017, in his 1-bdr, needing more assistance and attention in the last year. During that period his wife was moved to a higher level of memory care, where she passed in 2018.

The issue of other children in competition (one was executor) and not helping at the same level as yourself can be problematic. From the beginning I kept records and summarized for my in-laws each year. I let him know he should share the summary with each child (4). I acted on their behalf 100% and built a series of documents from which I could answer any question in the future.

For the home proceeds, we got together with F-I-L and discussed gifts with him for some of the cash. This was something he brought up. So he gifted less than he wanted to each child, and we put 100K into the checking account. Within a year it is was obvious that this cushion was not needed, so we moved 100K to their taxable brokerage.

Right away you need a place for the proceeds where it earns reasonable interest (like a hi-yield online account). You can link that as necessary, and move money to their checking as necessary to supplement the other income.

Good luck with this.

 

[Tetto]

Thank you; this mirrors my beginnings pretty closely. My dad still has money in his 401K- would it be prudent to pull that out and just deposit it into the checking? Probably not since its earning ~3% in a fixed income fund. I just dont want to get caught if and when they pass and i have to deal with these things in a more difficult manner. Selfish, i know....

For spouse's parents, here is a summary of what transpired.

In 2006 they asked me for help with investing and finances (about $250K invested), which I did until EOY 2018. About 2008 my wife began paying bills for their housing expenses. By 2011 my F-I-L could not cope with wife's dementia and erratic behavior. By the end of 2011 they moved from home to independent living (location I found) which was covered 100% by their SS and pension income. In 2012 their home was sold, for about $125K. About that time my wife became a joint holder of the checking account. In 2015 F-I-L moved to a 1 bdr, and she moved to assisted living. Their LTC policies started getting tapped (a great choice by M-I-L in her earlier years). He died 2017, in his 1-bdr, needing more assistance and attention in the last year. During that period his wife was moved to a higher level of memory care, where she passed in 2018.

The issue of other children in competition (one was executor) and not helping at the same level as yourself can be problematic. From the beginning I kept records and summarized for my in-laws each year. I let him know he should share the summary with each child (4). I acted on their behalf 100% and built a series of documents from which I could answer any question in the future.

For the home proceeds, we got together with F-I-L and discussed gifts with him for some of the cash. This was something he brought up. So he gifted less than he wanted to each child, and we put 100K into the checking account. Within a year it is was obvious that this cushion was not needed, so we moved 100K to their taxable brokerage.

Right away you need a place for the proceeds where it earns reasonable interest (like a hi-yield online account). You can link that as necessary, and move money to their checking as necessary to supplement the other income.

Good luck with this.

 

[MichaelB]

Thank you; this mirrors my beginnings pretty closely. My dad still has money in his 401K- would it be prudent to pull that out and just deposit it into the checking? Probably not since its earning ~3% in a fixed income fund. I just dont want to get caught if and when they pass and i have to deal with these things in a more difficult manner. Selfish, i know....

If that is a taxable transaction you might want to hold off a bit. If they are in assisted living there’s a good chance much of the cost can be used as a medical deduction.

 

[Tetto]

Quick update- parents are in assisted living now and adjusting to the new life. They love the food and activities, so this is good. The place has a great director who is on the ball and listens to family and residents- very nice. Now dealing with extricating my Mom from the financial stuff per lawyers advice. House listed an hour ago and already two showing tonight lined up. Insane

 

[daylatedollarshort]

Thanks for the update and good luck with the house sale.

 

[mountainsoft]

Some nursing homes won’t kick you out once you run out of money after you self pay for a period of time. They give you a Medicaid bed. Once you can’t pay a assisted living facility you are out. I think the two are being confused. Locally AL facilities won’t accept you if you have dementia. 4 months ago I helped my friend find a good one. Ours start at 4300/month for a studio and go up to 8k depending on how much care you need.

It really varies from one assisted living to another. When my mom had her stroke in 2017, we checked just about every AL in the county. I'd say about 30% of them have Medicaid agreements, the rest are out of pocket only.

The one we chose takes Medicaid after two years of direct payments. Mom had about 70K in savings, and we got another 220K or so when we sold her house. She also gets about 1900 from the RRB (SS). She has been in the assisted living about five years now. Rates generally go up every year, but she's paying 4400/month for a studio apartment. I need to recalculate her funds, but based on my last estimates she should have a couple more years before her money is gone and we'll have to get things set up with Medicaid. I'm not looking forward to dealing with all of that.

We will be retired by then and will only be able to afford about 300/month to help her with personal things (groceries, cable TV, etc.) Medicaid doesn't cover. I think they only allow something like 73/month for personal needs. That wouldn't even cover her cable bill (the only thing she does is watch TV all day). I've tried numerous streaming services but she couldn't figure any of them out.