Some documents on our website require Adobe Acrobat to view. You can Many times, a client will come to me and tell me that her mom has fallen, broken a hip and is now in rehab. The rehab social worker has indicated that mom, given her frailty and advanced age, is unlikely to be able to return home. Once the rehabilitation benefits under Medicare have been expended, the patient is then required to pay privately for their care. This can cost between $10,000 and $12,000 per month.
The above scenario falls into the topic of Medicaid Crisis Planning. Usually, there are only a few days in which to put together an asset protection plan for the ailing parent, so it is imperative that the client obtain sound legal advice. A wrong move can jeopardize all of the parent’s assets.
What can be done? It very much depends upon the family situation. If mom is in a nursing home and dad is living at home, many tools can be used to protect the assets. While there are less opportunities to secure assets if mom is widowed or divorced, there are still strategies that can be undertaken to minimize the cost of nursing home care.
Any strategy depends upon the facts and circumstances. If mom is widowed or divorced, and if the daughter has been living with and taking care of mom, then perhaps the house could be transferred to the daughter under one of the exceptions to the Disqualifying Transfer rules. If a child is herself disabled, the mother could transfer the house to the disabled child. It’s also possible to transfer any excess assets to a Pooled Trust which would provide benefits for mom and if any assets remained at her death, they would pass to a charitable organization.
If mom is married and her husband is living at home, he will be able to retain $109,560 of their combined assets. Mom may only have $2,000 in her name. While he lives at home, the state will not place a lien on the home. Dad can also change his Will so that if he dies, no assets pass to mom who is in a nursing home. In some cases, dad may be able to retain all of mom’s income, so that she pays nothing for the cost of her care.