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How can anyone know five years ahead of time the approximate date that one will have to go into a nursing home? I've never heard of such a thing. I am not a lawyer, but your interpretation of the law seems bizarre. In determining the five-year look-back period, O.K., the govt. will look back five years, but I would be amazed if that includes assessing one's state of mind five years ago. I wish one of our lawyers would post on this subject. Lenora? Marcg?
No one can know 5 years ahead of time whether he/she will need a SNF (except perhaps if you're dealing with an early dementia person who you think will get to X place in 5 years - but that's a real long shot).
Bottom line is government rules are trying to distinguish between real gifting - and "Medicaid planning". Robyn
We have ad discussions with or sons on this topic who are also the executors of our will. They understand there is a nest egg there but there are a lot of realities down the road. Or of the biggest is the current inability to sustain Medicaid spending and the fact that many states are cutting back on Medicaid spending. As the poop starts to hit the fan the desire to shield will go on the back burner. Save or risk something you may not like.
The "desire to shield" shouldn't even be on the burner for you. Assuming you can afford your 2 house lifestyle. At least not when it comes to your children (as between you and your wife - and your personal health stuff with the 2 of you - that's a different issue depending on how it plays out - I've made my POV clear on spousal issues).
And if your children are even engaging in this discussion with you - well I think (you don't want to know what I think).
I can tell you how it often plays out in later years. When parents are in SNF and kids have the money. Gosh - Mom doesn't really need those new expensive dentures that cost $2000 - let's buy her the $400 ones. And who cares about the expensive health care (like the concierge medical practice or care at places like Duke or perhaps UNC if Medicare won't cover it 100%). Or why buy Mom a custom wheelchair (Medicare won't pay for *any* wheelchair if you're in a SNF). Etc. Etc. Saw that a lot when my late FIL was in his SNF.
In all honesty - unless your kids have more money than you do - don't do any financial planning with them in terms of pre-death transfers (and if they have more money than you do - they won't be interested in pre-death transfers - unless they're exceptionally greedy ). Robyn
I believe that, in the event that you GAVE AWAY assets, and then discovered that you needed a nursing home, if five years had passed, those assets cannot be considered.
That is not the same thing as KNOWING you are going into a nursing home (in five years) and giving away your assets. It is a matter of intent. Giving away assets (or hiding them, or whatever), with the INTENTION of screwing the government is against the law. Giving away assets, and then finding out five years later that you have dementia or some other disease that will require care, is not intent. There is a huge difference in the eyes of the law.
20yrsinBranson
I'm trying to follow this and don't get what you're saying. What exactly is the difference between the blue and the green? The "intent" is surely the same—give money to family so that you have "less" at nursing home time.
And who can possibly know they're going to need a nursing home in X number of years, unless they are seriously ill when they start gifting and are certain that they will be "clearing" the 5-year lookback?
BTW, a friend's dad, a retired doctor around age 90, went into a post SNF near here - something like $360 per day. He spent down (or perhaps someone in the family "hid"??) his assets to a point that now Medicaid is picking it up. He was accepted into this facility when he was in the chips. Now, apparently, he cannot be kicked out due to lack of funds. I thought for sure he'd be "downgraded" to double room but no, he's still in his lovely single room (which I saw last year). How can Medicaid possibly pick up this expense, it seems like an outrage to the taxpayer!
Absolutely. Let me make some suggestions to those who want to benefit their children. These are all things that can be done during your lifetime:
1. Assistance with a college education or trade school. The most important gift a parent can give a child is the means to earn a decent living. The cost of higher education is about 3 X greater today (after inflation has been calculated) than it was 30 years ago. Children who have a valuable skill are less likely to be out of work or need other assistance from you during your lifetime. If they are willing to get an education, spend the money now. IMO, I'd prefer to do this and leave my children no inheritance at all)
2. Here's an interesting idea. Consider becoming the mortgagee to your children. Draw up a promissory note and a Deed of Trust. Require the children to pay you the market rate of interest just like they would to a mortgage company or bank. However, the kids get to deduct the interest they are paying you from their taxes and the money they are paying you goes into the bank (or preferably investments). When you and your spouse die, the money than goes to your children. In the meantime, though, they have to make mortgage payments and work just as hard as anyone else would. Make it clear if they stop making the payments, you will foreclose on the Trust Deed.
3. Consider just spending your money before you die. This eliminates all issues that go along with estate planning. I also think if you have helped educate your children, you've fulfilled your obligations to them. There is also the factor that if the children know you intend to spend your money, it encourages them to work harder (knowing there will be little or no inheritance) and reduces the unproductive time they spend day-dreaming about "what it will be like when all your money is theirs".
1. When my father died unexpectantly at the age of 56, he left myself and my 2 brothers with money to pay for college or for a down payment on a house if we didn't go to college. Fast forward 25+ years later when my mother's 4 grandchildren were entering college, she paid for a large portion of their college tuition, gifting each year they were in college. Totally unexpected.
2. My mother did this with my younger brother when he graduated from college, but he paid off the condo within a few years (renting rooms out).
3. When my mother was in her late-40's and starting to do well with her rentals, she started taking yearly summer trips to Switzerland to visit her relatives. Travel being her passion, she has traveled all over the world the past 30 or so years. She finally got a built-in pool in her mid-50's that my parents had debated forever about while we were growing up, and still enjoys it.
My mother is a very private person. My brothers and I are just happy that she's been happy and independent all these years (she can be very difficult). Now she has Alzheimer's and just recently asked one of my brothers to look over her finances, who has done very well for himself and has a good background to help with those matters.
Last edited by smpliving; 07-05-2013 at 06:47 PM..
The "desire to shield" shouldn't even be on the burner for you. Assuming you can afford your 2 house lifestyle. At least not when it comes to your children (as between you and your wife - and your personal health stuff with the 2 of you - that's a different issue depending on how it plays out - I've made my POV clear on spousal issues).
And if your children are even engaging in this discussion with you - well I think (you don't want to know what I think).
I can tell you how it often plays out in later years. When parents are in SNF and kids have the money. Gosh - Mom doesn't really need those new expensive dentures that cost $2000 - let's buy her the $400 ones. And who cares about the expensive health care (like the concierge medical practice or care at places like Duke or perhaps UNC if Medicare won't cover it 100%). Or why buy Mom a custom wheelchair (Medicare won't pay for *any* wheelchair if you're in a SNF). Etc. Etc. Saw that a lot when my late FIL was in his SNF.
In all honesty - unless your kids have more money than you do - don't do any financial planning with them in terms of pre-death transfers (and if they have more money than you do - they won't be interested in pre-death transfers - unless they're exceptionally greedy ). Robyn
You misread my words. My kids have no intent on trying to shield it is not their stlye. They have always from a young age gotten economic and financial education from me on various aspects of finances and Saving. Yes we are good with assisted living and probably most nursing home scenarios. Part of the reason for discussion is to help them with their retirement planning and knowing the various issues to think about and health care is and ought to be on everyone's agenda. When graduating from college they evaluated job offers with that and other considerations in mind. Again it is up to each of bid the priorities we hope to instill on our kids and that includes 529's, FYI we paid cash for the main house.
I'm trying to follow this and don't get what you're saying. What exactly is the difference between the blue and the green? The "intent" is surely the same—give money to family so that you have "less" at nursing home time.
And who can possibly know they're going to need a nursing home in X number of years, unless they are seriously ill when they start gifting and are certain that they will be "clearing" the 5-year lookback?
BTW, a friend's dad, a retired doctor around age 90, went into a post SNF near here - something like $360 per day. He spent down (or perhaps someone in the family "hid"??) his assets to a point that now Medicaid is picking it up. He was accepted into this facility when he was in the chips. Now, apparently, he cannot be kicked out due to lack of funds. I thought for sure he'd be "downgraded" to double room but no, he's still in his lovely single room (which I saw last year). How can Medicaid possibly pick up this expense, it seems like an outrage to the taxpayer!
This is what I was talking about in an earlier post ' get admitted to the best facility you
possibly can because they are apt to keep you.
When you are in rehab the NH gets more money from medicare. Then they will
probably keep you when you use all your money and go onto medcaid.
Medicaid only pays a certain amount no matter what.
And NH usually have a number of beds for that purpose.
The NH WILL move him if they have a paying customer for that room.
Which is more the outrage, the person who paid full boat for a number of years which helped to pay their cost plus supplement the shortage from the facility being under paid by Medicaid or the person who never contributed much of anything from day one or for a very short time span. They need full boat people and often will compete for them.
The older you get the more of a disadvantage you face in trying to protect your life savings. If you own your home and then have a large medical bill the first thing the hospital will do is try to attach a lien on your home. That is your reward for trying to own your home. When you die only the people YOU WANT should be counting every penny you have and deciding who can own what, It is none of their business.It is wrong that the people who dont own a thing (not even a real name) can get free help but hard working people are the first to have their possessions taken away.All retired people need to get their assets in CASH and hide them from the government money counters.
Which is more the outrage, the person who paid full boat for a number of years which helped to pay their cost plus supplement the shortage from the facility being under paid by Medicaid or the person who never contributed much of anything from day one or for a very short time span. They need full boat people and often will compete for them.
When you pay the full amount you are 'taxed' a percentage over the price to pay for
others who are on Medicaid. My fil did that. It was outrageous IMO
The older you get the more of a disadvantage you face in trying to protect your life savings. If you own your home and then have a large medical bill the first thing the hospital will do is try to attach a lien on your home. That is your reward for trying to own your home. When you die only the people YOU WANT should be counting every penny you have and deciding who can own what, It is none of their business.It is wrong that the people who dont own a thing (not even a real name) can get free help but hard working people are the first to have their possessions taken away.All retired people need to get their assets in CASH and hide them from the government money counters.
This is why I am planning to spend money and have a good time.
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). Robyn
