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Spoiler Alert:  Don’t Pay until it’s all gone!

You have done everything possible to keep Momma home as long as possible. Now home care is no longer working. And the doctors are telling you that Mom needs a Nursing Home level of care. You have resisted this move with every fiber of your being. But now you realized that the professional care that Momma would receive, from a Skilled Care Nursing Facility, is no longer a nicety. It’s a necessity.

Often the decision to place a Loved One in a Nursing Home is made after something bad happens. Such as Momma falling and breaking a hip. When a Senior has a catastrophic health challenge. Such as a broken bone or serious illness that requires hospitalization. This event may force the family to focus on the sobering options. Sometimes the only option is Nursing Home care.

After receiving a recommendation from the hospital staff that Momma could no longer return home. And would require Nursing Home care, Susie, the youngest daughter, volunteered to visit 3 Nursing Homes in the area. She then see what she could learn about this type of care and also find how much Nursing Homes cost.

When Susie reported back to the family the next day, it was quite a shocker to all of them. Susie reported that the nursing homes that she looked at were in the $5,500 per month range. In Arkansas, the average cost of nursing home care, (average costs of all nursing homes in the state including most expensive and least expensive) is $5,098 a month.

Protecting money for the “well spouse”

The family realized that paying this much for Mom’s care would totally wipe out her savings. And that is within the matter of a year and would leave their Dad, who was the “well spouse” at home, destitute.  Since Dad is in fairly decent health and is expected to live several more years. Spending down all the money and leaving him destitute is not a good option. The kids quickly established a goal of protecting as many assets for the benefit of Dad as possible

Medicare.  The hospital discharge planner told the family that since Mom had been admitted as a patient (as opposed to being there on observation status) and had stayed in the hospital for three midnights, that Medicare would pay up to 100 days of rehabilitative care for Mom in a local Nursing Home. One of the Nursing Homes that Susie had visited had a rehab wing. So the family agreed to transfer Mom to that facility upon her discharge from the hospital.

Rehabilitative Care in the Nursing Home.  Mom was discharged from the hospital the next day and checked into the local Nursing Home. She began receiving physical therapy and begin her slow recovery on what the family hoped would be “back to normal” After several days the family received another bit of bad news. Mom’s doctor said that Momma would not be able to return home. That is because her health has declined to the point where she would need long-term care assistance for the rest of her life. With her Medicare days coming swiftly to an end. The family looked at how they could pay for the needed Nursing Home care for Momma. For the remainder of her life, without leaving Dad destitute.  

The Options

The options for this family were as follows:

  1. Private Pay – Since Mom and Dad had saved over $100,000 in liquid assets, the easiest thing was just to write a check out of Mom & Dad’s checking account every month for the payment of Mom’s nursing home care. Unfortunately, most families are taking this route who have a Loved One that goes into a Nursing Home. Not knowing any better. They pay monthly for their declining Loved One’s care until all of the couple’s hard-earned savings has been depleted. Spending down all assets is especially burdensome. Where there is a “well spouse” at home that will need these funds to support their lifestyle later in life. Congress has passed laws to prevent the impoverishment of spouses and situations like this. But unfortunately, most families don’t know that they have an option to protect money so they just spend it all down.
  2. VA Assistance – Since Dad is a retired veteran and served in the military during a time of war, Mom may be eligible to receive some assistance from the Veterans Administration to help pay for her stay in the nursing home. Even though the amount of money that Mom can receive from the VA may be much less than the cost of care in a Nursing Home. You should not dismiss this option very quickly.  If Mom and Dad have substantial income from other sources. Or could reposition other assets to generate more monthly income. This option may be workable.
  3. Repositioning Financial Assets – If Mom or Dad have substantial Financial Resources, it may be possible for the family to meet with their financial planner to work up a financial plan to generate additional income from existing assets.  Sometimes you can invest the assets in such a manner to generate additional income. That way it will help pay for the increased cost of Mom’s care. While this is not an option for every family. It is an option for a few. It should be carefully considered after consultation with your financial advisor, Elder Law Attorney, and other qualified professionals.
  4. Selling Assets – Sometimes the family has additional assets that they may not need and can sell to generate cash to help pay for a Loved One’s long-term care stay. While no one likes to sell off hard-earned family assets. This is an option that is available to some families to help pay for their Loved Ones’ care.
  5. Medicaid –  Medicaid is a government program that pays for long-term care for your Loved One after they become income and asset eligible. The unspoken little secret is that many families pay out everything for Nursing Home care before receiving Medicaid – and did not have to do so.  The problem is that these families who spent down everything simply didn’t know that they had an option – they didn’t know that they could preserve some of the family assets, rather than spend them all down.  There are legitimate ways to protect a substantial amount of assets in most cases.  We will be discussing some of the ways to qualify for Medicaid and to protect assets (at the same time), in our next blog post.

In the meantime…

Do you have a Loved One receiving long-term care in a Nursing Home and are paying for the care out-of-pocket? It would be good advice to check with your local Elder Law Attorney. You can determine if you have an option to protect and preserve some of the assets that your Loved One worked so hard to accumulate.

Please watch our webinar on Ways to Pay for a Nursing Home Stay. In this webinar, we primarily discuss how to get your Loved One qualified for Medicaid benefits that will pay their Long-Term Care Nursing Home expenses. Some people spend everything before attempting to qualify for Medicaid. It doesn’t have to be this way! Please feel free to call us at 501-843-9014.

Best wishes to you as you attempt to obtain the best care for the declining Senior in your life. As well as to help them protect and preserve their life savings.

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. Don’t try to plan 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.