Earlier this week, at a lunch meeting with a financial advisor who has referred many estate planning clients to me over the past 15+ years, our discussion turned to an issue one of his clients was experiencing with regard to his elderly parents. This client’s mother is in an assisted living facility, and his father is in a skilled nursing facility. The father suffers from Alzheimer’s and the skilled nursing home bill is over $8,000 per month. The mother is paying about $2,500 per month for the assisted living facility, and likely will be moving to the skilled nursing facility within the next 12 months. The advisor’s client was complaining that the drain on the family’s assets had reached a point where the parents remaining funds (approximately $200,000) would be used up within the next year, and he didn’t know what he would do from that point forward to avoid using his own funds to pay for his parents’ nursing home bills. B8EBPU8TEJPT
What was surprising to me was that the financial advisor, who I have worked fairly closely with over the last 15 years, was not aware that there are many opportunities to preserve family assets when a parent, or spouse, goes into a nursing home. I explained to him that with the implementation of an appropriate Medicaid spend down plan tailored to this family’s circumstance, this family could preserve substantially all of the parents’ remaining funds, without paying all of it to the nursing home, and qualify initially the father, and later the mother, for Medicaid benefits that will ultimately pay for the nursing home costs for both of his parents.
My financial advisor friend was concerned that the care the father would receive from the nursing home after qualifying for Medicaid benefits would be inferior to what he is receiving now as a private pay resident. This is a common “myth” with regard to Medicaid benefits and nursing homes. The reality is that federal statutes prohibit a nursing home that is qualified to house Medicaid benefit recipients from discriminating against any resident for receiving those benefits. The further reality is that in practically all cases, there is absolutely no difference between the treatment received in a qualified nursing home by private pay residents and Medicaid residents.
As I have thought about our lunch discussion earlier this week, it occurred to me that many financial advisors and families are also not be aware that (1) there are many opportunities to “spend down” assets in a manner that allows the preservation of a substantial part of the family’s assets for the benefit of the non-institutionalized spouse and other family members of nursing home residents; and (2) that we provide those planning services for our clients, and have been doing so for over 10 years. We historically have not promoted these services because the services have been provided typically to the parents of some of our estate planning clients. The combination of the population living longer and growing older, and the diminished financial resources of elderly folks who traditionally have had sufficient funds to pay for their long term care, because of the economic tumult that we have experienced over the last few years, there is an increasing desire, and need, for long term care planning that will provide for the preservation of family assets when it is necessary for someone to move into a skilled nursing facility. With nursing home care now costing $75,000 – $80,000 per year, and assisted living facilities costing $30,000 – $40,000 per year, it doesn’t take long for a significant retirement nest egg to be depleted if proper planning is not completed and implemented.
If you would like to become more familiar with the potential for preserving your assets, or the assets of your elderly parents, you may want to review the Medicaid planning page from our website: http://www.TheColemanLawFirm.net/Medicaid_Planning_Attorneys.php.
About eight years ago we helped a retired Army general qualify his wife for Medicaid benefits. He had been paying the private pay rate, at that time $6,500, for the entire 10 year period that she had been in the nursing home. After she qualified for Medicaid, that monthly expense totally stopped for him, his income increased by almost $7,000 a month in addition to the elimination of the cost of the nursing home, and he was able to preserve all of his net worth through the Medicaid planning process, legally and ethically. He, his financial advisor, his banker, and his accountant, were all ecstatic. His wife had exactly the same care after she qualified for Medicaid as she had before qualifying for Medicaid, in the same room, and in the same bed.
We currently have several Medicaid planning cases in various stages of the process, accomplishing the same kind of results for these clients, and their families, as we did for the retired general.
If you, your spouse, your parent, or another family member, are currently residing in a skilled nursing facility, or if someone in your family will be moved into a skilled nursing facility within the next five years, preservation of a substantial amount of that family member’s assets can be accomplished, legally and ethically, through appropriate Medicaid spend down planning and implementation. You owe it to yourself, and your family, to discuss with an elder law attorney experienced in Medicaid planning how such a spend down plan can help you preserve assets for yourself and your family.
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