Way OT: Assets, nursing homes, this is new one

I know its a tractor forum. And I know when to seek legal counsel so don't hammer me for asking here but this is a new one to me. BIL just had to put his pops in a home. Kids all fighting over assets, what to do, the mom still ok. BIL says his brother found a lawyer that knows a "loophole" and he can put all of the mom's money in a special "account" for 90 days while feds take "snapshot" of her assets so pops get Medicaid nursing home. Then give it back to her. All I know is last year I spoke with a reputable estate planning attorney and he told me there is NO WAY to hide assets or avoid the "look back" period. Anyone ever hear of this magic "loophole"?

When they do find out about the money (and they will(btdt). You will repay any money they want PLUS interest.

Similar situation i know of with out fighting! But attorney stated about 15% of this persons assets could be protected as 5yr normal time span had passed.I am thinking maybe each person who could receive normal yearly gift was taken out of assets.I think that nursing home resident is still being paid from cash .

It is my understanding that any assets must face a 60 month look back on trusts. I would expect that the funds will be seized if hidden.

I will take John T's disclaimer that this is free advice.

NOT legal. Do it right or they will make you more than pay.

Depending on what the will says kids have no right to assets. Everything should go to Mom 1st for her use. All that is moot as no one has died yet.

Face that fact that they're going have to be broke to get society to pay for his nursing home.

Certainly no expert but was involved in a similar scenario.

Sounds like a good way for someone to get charged with fraud.

I should clarify a little. Kids bought land from the mom now instead of inheriting so the lawyer can hide the money from sale in "magic" place so the mom qualifies for medicare for her husbands care and also dodge the lookback period. How does that work?! I guess there really is not a fight about the will but a fight about the amount they paid.

In my law practice I prepare estate plans (NO two have been alike, each is unique) and although I do NOT practice Medicaid planning law per se, I know its too late (Wayyyyy to late actually) to wait until nursing home time to try and hide or save or preserve major assetts (subject to, of course, some exceptions where the kids might get some share) such as a home in cases where theres no spouse and depending on the patients health and future prospects (might she ever return there???). There are "look back" periods of several years and thats why I plan to the extent possible (we cant predict the future) to save and protect and keep those big assets LIKE FIVE YEARS before the Nursing Home. There are indeed legal methods to preserve assets IF DONE EARLY ENOUGH and thats what I do in my practice BUT NOT THE NIGHT BEFORE GRANNY IS ADMITTED.

Tell you what, Medicaid law is highly specialized and complicated, and most attorneys who dont practice in the very limited very complex specific area (such as myself) arent qualified to render opinions worth much more then all the untrained know it all Billy Bobs who might answer SO BEWARE. If there ever was an area of the law where you need professional advice MEDICAID LAW IS IT but it sounds like you already know that and are on the right track and will seek very specialized very professional advice NOT WHAT WORKED FOR BILLY BOB AND BUBBA.

Shop around for professional advice, get second professional opinions and yes the family may be able to save some assets and still do it legally BUT THATS A HUGE RISK SO BE SURE THE ADVICE YOU TAKE IS CORRECT.......

Best wishes, John T, estate planning attorney but NOT a Medicaid expert (other then plan for it years BEFORE nursing home time and it can be done) Not sure if Co Counsel Mike practices in Medicaid or not??? if so take his advice over mine

Someone changing political views at the last moment? Feds will look back at the time of death also BTDT

The sale of the land WILL be questioned unless an appraisal took place and they paid FAIR market value.

Nursing home care is a Medicaid benefit, which is now administered by states. The way states handle it varies. I will not be popular with this statement, but if she has the money and/or assets why should you expect the rest of us taxpayers to provide her care so you can keep the money?

Going through this with my FIL. Feds and state WILL get their money. I harped on my wife and FIl for the last few years about consulting an estate/trust attorney to no avail. Short story - FIL had a stroke year ago that resulted in dimensia - had to put him in a nursing home (no choice as he became very combative) and due to the 5 year look back had to cash in his whole life policies (that got taxed as income for him of course) to pay for his monthly bill to the nursing home.
See an attorney that specializes in estates/trusts - best advise there is.

I make no bones about that, and agree whole heartedly that one should do what is ethical and pay their own way. My question(s) was just to find out if such a loophole exists that is so easy to hide assets in.

We have long term care insurance, I think this is the ethical way of estate planning.

I had a similar experience wth my father. We had deeded his land to myself and my son more than 5 years before putting him in the nursing home, so his real estate was protected.

His money was left in his name, if I had told him we need to take care of this also more than 5 years before the nursing home he would have agreed, but I felt like it was his and I did not want him to feel like he had nothing left.

After I checked him in the nursing home I was told I needed to visit the Department of Human Services for advice on how his cash could be spent. The lady I spoke with said I could spend the cash on what was needed to take care of him and his funeral. What it meant to take care of him was his clothes, medicine, medicare supplement insurance, etc. I paid for his funeral and let me tell you, I spared no expense. He had the best casket, vault, tombstone, etc that was offered. I felt like this was the only way I could let him take advantage of all those years of work. As it all played out my Dad died before he outlived his money.

The hardest part of this process was we live in a small town and know everyone. This being said I watched the folks who had never thought about tomorrow or took care of their money get their nursing home bill paid for by our government while I wrote a check for my Dad's care every month. I did not and still do not think this is fair to those who work and save for their future. The only thing I could get through my head in a positive way, was a thought I had the night he passed away----He paid his own DAMNED way with no help from no one, not even the government. Best of luck....

Redtom, I know of no Loop hole, Does not mean that one may exist.
There is a 5 yr Look-back that Medicaid can do... that is to prevent a last minuet attempt of the family to keep from paying for Nursing Home cost.
There is Nothing wrong or Illegal or Immoral in Pre-planning for such a time and Moving ownership of any and all properties out of parents name and put in other name IF done 5 or more yrs prior needing Nursing Home Care. or Have LTC Ins or an Annuity or large Life Policy that had LTC provisions!
Any attempt to circumvent the 5 yr rule and one is on real thin Ice here!!!
Later,
John A.

No way to avoid the "lookback" legally, as far as I know. Could be like the cartoon of the lawyer looking at a sheaf of papers, then looking at the client across the desk and declaring, "I think your loophole has become a noose."

Or maybe the "special account" was like what a lawyer for one of my PCA loan customers was talking about- we were about to sieze his cattle, and the lawyer advised him to sell everything, convert it to cash, and bring it to the lawyers office in grocery sacks for safekeeping. The guy did so, and the lawyer skipped with the money. The farmer and PCA became unlikely co-plaintiffs in a lawsuit against the lawyer. We didn't get much of the money back, but we did get the guy disbarred.

Just use their money for their care, and don't try to foist it off on the taxpayers.

I know a guy who had all his excavation equipment auctioned off to satisfy creditors. Many of his toys and a lot of cash were "protected" however, by being "transferred" to relatives. This had been done years earlier however. Giving is legal but not with the intent of it being temporary. IRS has rules on that and I'm sure that they will be scrutinizing his future returns.

I believe you better listen to your reputable estate attorney or the end result might be free room and board for those convicted of fraud.

what if a divores was implemented NOW at least one spouse would have one half (possibly). Only half would be considered as medicare reimbursment. Divorse would not mean other spouse didnt visit and help care for other just a legale move. I will claim a disclamer on this advise . I do have an excellent lawyer. He is and old fart lives i n southern ind, travels to tractor shows with a banjo. He suffers from a desolusion that he can actually play the darn thing.

already checked into that , as were goin gthru this with my 90 year old mom who is level 3 demincia, in trying to save some of her assets for me and my sis, [ the state shouldnt get it all should they?] the family lawyer advises that there is no "magic loophole you can drop money into to make it dissapear, there are some things you can do over time to sideline a little money depending on how your banking setup is but it takes years to make any appreciable amount of money go missing, everything has to check out and the nursing home looks back 5 to 7 years here, any large movement of money during that time, or after she is being helped by any health orginazation will show up and you will have to repay it upon demand your only out is if she was one of those few who didnt trust banks and kept a large sum on cash stashed someplace at home

And this used to be the place where everyone railed and ranted about freeloaders. Funny how it is OK if my family figures out how to get something from the Govment outside the rules.

And you are all giving him advice how to do it.

The kids should quit fighting since the assets won't last long enough for them to even smell them. That special account is an annuity but it has to be permanent and proceeds from the annuity have to be used for the parents' maintenance.

Geeeeeeeeeeeee Neighbor, who is that no good lawyer Im gonna have him disbarred.

Actually, divorce is indeed one way that can help with Medicaid BUT THATS ALL IM GONNA SAY ABOUT THAT

However, its less a problem when BOTH spouses are still around, they cant take the home away from one who still resides there, the true problem arises when ONLY one is left and the best and safest way to plan for an aging parent is to dispose of their assetts (and plan the estate) five years or more BEFORE nursing home days.

See you at Elnora tractor show in September???

John T

Co Counsel, thats kind of how I handle it, I EITHER take care of it five years BEFORE nursing home time or else they use up assets and spend down then medicaid finally kicks in.

John T

One of my co-worker's stopped by a few weeks ago and he told me his mother is an assisted living facility. She's in her 90's and Medicaid cover's her cost. She sold the home years ago when her husband died. She was only getting a survivor annuity from the government and a little social security. She keeps the$70.00 SS check.

Her sister is also in the same facility, but her sister is well off and get's no Medicaid. One of my supervisor's and his wife are in a local assisted living facility. He's a 10 point vet from WW2 and is blind. They're paying about $8000.00 each per month. He called me a few days ago and now he has to wear a tie to eat his meals. They've never sold the home as all their kids are scattered around the country. They're both in their 90's. They sent all their children to college and may not have saved a lot of money. I've never asked him, but Medicaid may be paying the bill. Hal

What do the Feds and the State have to do with it? You are paying for a PRIVATELY OWNED facility to care for your parents. Once your parents are broke then a WELFARE program picks up the tab.

My Mom was in the Alois Alzheimer Center, Medicare paid some, P&G paid some, and I wrote out a large check each month.

I find it amazing what is asked on this forum and the fact that people will give advice.

I would not be surprised to see someone ask how to rob a bank or produce fake ID. Somebody else would reply with "how to" info!!!!!

When you feel you are among friends, you ask most anything that appears on your radar. I was guardian and conservator for my older brother. It was pretty well cut and dried as he had a stroke. It wasn't the nursing home that actually did the dictating of procedures, it was the state and county through family services. One of the first orders of the day he was put in nursing home was to visit the social services office. They lay down the rules they are held too. If the person has enough money to pay his or her own way, social services still has their nose involved just to make sure it is all legit. Medicare takes care of first few months, then you or Medicaid have to pay. All your assests have to be assessed for value. I had to have an auction of his personal prop and machinery etc, then sell his farm. It was a small acreage so it did not last his 3 1/2 years he lived at the home. Ran short a couple months. I was so frustrated from the different avenues each agency took. I had to deal with an attorney of course, Dept of veteran affairs, family services (county) and the nursing home itself. I told them they should all get together at one table and get their act together. They didn't think much of my idea though. If a person has enough financial means to pay their own way, you could give away or sell any or all of your property as long as you are still able to make all payments to home etc and do this all before the five year look back her in Minn. One more thing, not one of the agency's including the attorney could give me a reasonable answer as to how much I could receive to help pay for my lost income and expenses. I took 50 dollars a month until the last they said that was too much and said 35 would be about right. The whole process took a great deal out of me but he was my big brother and I would do it a gain if need be.

A friend is trying this tactic right now. His wife literally went crazy and tried to commit suicide. She injured herself very badly and will probably need to be in a confined care facility for the rest of her life. They had no insurance and no real hope of EVER paying for the immediate care and long term care she has received and will receive.

My friend loves his wife, and divorce was not the choice he wanted to make. But that choice seems the only way to possibly qualify her for Medicaid. It also may require my friend to file for bankruptcy. Not a good situation for a 60 year old guy trying to run a 1 semi trucking business that has kept them afloat for the last 10 years after he got injured and no longer could work as a master diesel mechanic.

It will be interesting to see how it all plays out. I wish there had been some better choices. I pray for my friend and his wife.

Run for public office....

It's pretty easy to rob a bank. The trick is to get away with the money, stay anonymous, and live to enjoy it.

It may be the ethical way of estate planning, but it also may not be the best choice. I helped my Mom get LTC insurance some years ago, and now it pays about half of her nursing home bill. Luckily she has good monthly income from pensions and social security, so her bank account balances only go down a little each month.

Mom had to be confined in the dementia unit a couple of years ago, because she kept walking away from the non-confinement assisted living unit she had been in. The dementia unit costs over $9K per month.

Most of the other patients in the dementia unit are there on Medicaid. They get EXACTLY the same treatment as my Mom does as a privately paid patient. EXCEPT for the fact that we have to pay for Mom"s adult diapers, medications and anything else she might need. The Medicaid patients all get those items paid for.

My parents lived frugally, worked hard and made good financial decisions, so that after my Dad died, Mom had a fair amount of money.

Some years ago, I helped Mom invest in LTC insurance. Over the years, we paid in $40k to $50k in premiums. Had Mom passed without ever going into a nursing home, the estate would have not recovered anything from the LTC policy.

As it is, Mom IS receiving some benefits. I would guess that we have exceeded the investment we made for the LTC insurance. The policy will pay for 5 years or a dollar payout figure, which I think was $500k, whichever comes first. After that we will be responsible for paying for her care.

Mom still has about $300k in the bank. We have no idea of how long she will continue to live and need to be in the nursing home.

If I had known then what I know now, I think we would have done things differently. I have 3 siblings, and we would have distributed the bulk of Mom"s money in the family, early enough so her net worth would have qualified her for Medicaid. As it is, I believe that her money WILL be used up paying for care that other families get essentially for free.

It galls me that the way things are, my Mom gets exactly the same (pretty good) treatment as the Medicaid patients get, except that I end up writing checks for about $9500 a month while their families pay nothing. That hardly seems fair.

It sure makes me wonder if "doing the right thing" is a stupid financial decision. An interesting comment on the time we live in.

Oh well, live and learn. I can"t change the decisions made years ago. Good luck!