How Can the Government Tell Me I Can’t Help My Family?

Mary had been reading my blog posts for some time now about the need to plan ahead for long term care. Something struck a chord with her and she called.  She has a home and about $200,000 in investments.  While still healthy, she is 70 and thinking about the future.  I then asked her if she had made any gifts to her kids or grandkids.  She replied, âNo gifts but I am helping out my son Jim a little bit because he has been out of work for 6 monthsâ.

âWell, Mary, actually, the money you are giving your son may disqualify you for government benefits down the road, should you need themâ, I explained.  Mary became exasperated.  âJim has had such a tough time finding a job in this economy.  How can the government tell me I canât help my family when they are in need?â   The reason for this, if you have been reading my posts over the past number of months, is the Medicaid spend down rules.  The government wants you to spend your money on your own long term care first, before asking for assistance.

Now, not all your money must be spent on long term care.  But it must be spent in such a way that you are getting something of equal value back.  Mary heard this and in an exasperated tone cried, âwhat could provide me greater value and satisfaction than helping to keep a roof over my son, daughter-in-law and grandchildrenâs heads and food on the table, until Jim can get back on his feet?  My parents helped us out when my husband lost his job.  In tough times our family has always pulled together and pitched in.  Jim is a good son.  He just needs a break.â

While you and I may view Maryâs help as essential and proper, unfortunately the government does not.  Mary estimates that she has given Jim $50,000 over the last 6 months and intends to continue to do so.  Right now, however, she has a potential Medicaid penalty of about 7 months and that will only increase if she continues to advance funds to Jim.

Mary is really getting agitated now.  âSo are you telling me I have to stand by and watch Jim lose his house — that I canât do anything?â  âNot at allâ, I replied.  âYou can be there for Jim, but we have to do it in a way that wonât create long term care problems for you down the road.â   In next weekâs post Iâll share with you what I told Mary.