Elder CarePosted: September 8, 2011
Older people sometimes require nursing homes, assisted living, or some other form of elder care, and someone pays for it. Government agencies may pay some or all, but not before the person (and spouse if married) spend a significant portion of their “non-exempt” assets (e.g. bank accounts, retirement accounts, cash under the mattress, etc.) to hit the threshold where the guv’mint will step in to assist. Exempt assets (at least where Medicaid is involved) may include a home, one automobile, household goods, personal effects, certain life insurance, and pre-paid burial funds.
An Nebraska attorney friend recently told me that one method of reducing non-exempt assets so that you get down to the threshold is to purchase an annuity that repays you (with a little interest) over a fixed time period. The monthly payments are considered exempt income. So if you live out the time period, you get all of your money back instead of spending it on care to hit the threshold. Pretty schweet deal if true.
Another method attorney friend mentioned would apply to real property (excluding your primary house, which is exempt already–right?). (My Uncle Wayne used to ask “right?” a lot when he was explaining something, and it rubbed off on me.) For example, if you own a farm, you could deed the property to your kids and maintain what’s called a “life estate” (meaning you have a possessory interest in said farm until you die). If you live for at least 5 years, Medicaid acts like you never even owned the farm. If you don’t, the 5 year lookback period applies and the farm is considered an asset.
I’m not advising you, kind reader, to do either of these if applicable. Also, remember that state laws vary considerably.
I am advising you to consult a capable attorney to discuss options. Some people just say “Dang, I guess I’ll just have to spend a bunch of money to hit the threshold.” Not necessarily so …
Speaking of attorneys, do you know how to distinguish an attorney and a rat, both of which are roadkill?
Look for skid marks–they’ll be in front of the rat.
Oh, and please enlighten me if you know more about this topic or if I’m inaccurate.
Here’s someone trying to claim the title World’s Oldest Person: