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Worried About a Disabled ChildEven After You Go to a Nursing Home!

John & Mary Sample (our fictional heroes for today) live in Central Arkansas. They are now in their mid-70s and they just celebrated their 50th anniversary. The Samples have been blessed with three wonderful children. One is a nurse, one is a school teacher, and their youngest child, Tim, is disabled from birth and is not able to work.

Tim is now in his late 40’s and needs assistance with activities of daily living. He has always lived with his parents, but because of vocational training that he is receiving, he hopes to someday have a job and live independently. Tim receives Social Security (SSI) of about $580 a month but his parents have always provided for some of his basic needs.

Modest but Comfortable Lifestyle

Mr. and Mrs. Sample lead a modest lifestyle and have a combined income of about $2,500 per month. They are able to live on this and continue to save about $250 per month. Like most of their generation, the Samples are excellent savers. In fact, they have accumulated a nice little nest egg. They have paid for their home and have around $100,000 in liquid assets.

Unfortunately, several months ago, Mr. Sample had a stroke and will need skilled nursing care for the remainder of his life. He moved to the nursing home right up the street and is satisfied with the care he is getting. Mrs. Sample planned to stay home and did so for a few months, but now her worst fears are coming to pass. Her Parkinson’s Disease has progressed to the point where she can’t stay at home – she also will need skilled care in a nursing home.

Initially, the Samples’ were just paying for their nursing care out of pocket. But with both of them in the nursing home, they are very concerned about the money.

Costs and Worries are Mounting

Mr. & Mrs. Sample fret over the fact that the nursing home will cost about $12,000 a month for both of them…and that doesn’t count the cost of the medication. They are also very concerned about their disabled son, Tim. They have been helping to support him for years, but now that all of their income is going to the nursing home and their savings are dwindling fast, what will they do?

Preserving Assets for the Family

Fortunately, there is good news for the Sample family. With some proper (and quick!) planning, a substantial portion of their assets can be preserved for their family and for their disabled son.

Without proper planning and with both spouses in the nursing home, they would normally quickly spend down their assets to pay for the cost of nursing home care. They would continue to pay until they had “spent down” to the point where they would qualify for Medicaid assistance. Additionally, their family home would be subject to Medicaid recoupment in the future after their deaths.

But in the Sample’s situation, they don’t have to lose everything that it took them a lifetime to save. Most importantly, they don’t have to leave their disabled son without a place to live.

A Happy Ending

Fortunately with proper planning, Mr. and Mrs. Sample can preserve their home for the benefit of their son with a disability and incur no penalty. In their specific case, Mr. & Mrs. Sample can not only preserve their home and some of their assets, but they can each qualify for Medicaid to help pay for their long term care expenses in a nursing home.

Their cost of care in the nursing home will be paid by Medicaid AND they will feel better knowing that their disabled son, Tim will have a home – and not just any home. He will be able to live in his family home.

We work with people to do various types of planning. There is no one size fits all plan. There are many exceptions in the law such as the ones discussed above. Please don’t try to do this alone – Instead, meet with your attorney (hopefully us!) to discuss your unique situation and have a plan crafted that is best for you. If we can help you with your planning process, click the button below to schedule your FREE 10-minute introductory consultation.

At ELP, we work to protect you!

We work with people to do various types of estate planning. There is no one size fits all plan and no plan is categorically better than others. The key is to meet with your attorney (hopefully us!) to discuss your unique situation and have a plan crafted that is best for you. If you or your declining parent is not 100% sure of their beneficiary designations, please be proactive and give us a call before you (or they) lose capacity.

Without a properly flexible plan, how will you care for your declining Loved One, be there for your family, get work done, and pivot in the event of a crisis? What about cost? How will you pay for it all? If you make the Assisted Living Facility choice, how long will the money last? Together, we can craft a proactive plan! Lets get started protecting your assets!

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We have covered some legal topics in this edition and as always, I want to emphasize that (1) the law is different in every state, so if you live in a state other than Arkansas, just know that the law may be totally different in your state; (2) your situation is unique, so one size doesn’t fit all – meaning what we discuss herein may not be right for you; (3) we have purposely over-simplified many of the topics above (otherwise this would be many pages long and unreadable because of all of the legalize). It is imperative that you meet with your attorney (hopefully us!) and get a plan that will work for you. Please don’t attempt DIY Estate Planning based on what you read in this (or any) article AND don’t try to go it alone. Please consider this, get your questions answered and take action.