Home for the Holidays (Part 2)
Last week I was talking about changes in loved ones we may notice around holiday time, simply because we may be returning home after some time away. So what can or should you do about it? A physical and neurological exam should identify any medical issues. A Geriatric Care Manager (GCM) can help assess the options available that will allow your loved one to continue to live a full, fruitful and safe life. Suggestions may include a home health aide, adult day care, and personal organizer to help with money management. If your loved one can no longer live alone, possible alternative living arrangements include another family member’s home, assisted living, senior housing or nursing home. Each choice has pros and cons and expense is often an issue. Planning should be done as early as possible to determine how to pay for what could, in the future, be several thousand dollars or more a month in long term care expenses. That might include self funding with the purchase of financial products or qualifying for government benefits such as Medicaid and Veteran’s benefits or possibly both. Because the family is together once again, the holidays are a good time to begin discussing
Home for the Holidays (Part 1)
Once again the holiday season is upon us, a time of joy but also stress. I’ve written about this issue in the past but it bears repeating. We often visit family members we haven’t seen in some time and that’s when changes in older loved ones become more noticeable. Some of the changes that may indicate your loved one needs some extra help: Weight loss Deterioration in personal hygiene Unusually dirty or messy home Unusually loud or quiet, paranoid or agitated behavior Local friends and relatives noticing changes in behavior Self-imposed isolation, stops attending activities Signs of forgetfulness such as unopened mail, piling newspapers, missed appointments, unfilled prescriptions Signs of poorly managed finances, such as not paying bills, losing money, paying bills twice Unusual purchases So what should you be doing if you see any of the above? Next week I’ll share that with you.
When to Sell the Home (Part 2)
Last week I told you that Dave called because his dad needs to go to a nursing home and he is now in “spend down mode”. He plans to sell the home, spend down the proceeds from the sale and then apply for Medicaid. A straight forward, sound approach? No, it’s not. At least not in Dave’s case. That’s because Dave told me about gifts his Dad made to help out his brother Joe when he was out of work and Dad’s preference to draw out and use cash to meet many of his expenses. Dave figured that he would use the cash from the sale of the home and when that is spent down to under $2000 he would simply apply for Medicaid with no problem. What Dave does not understand is how Medicaid’s lookback and penalty work. The transfers to Joe will carry a penalty because Dad didn’t receive anything of equal value back in product or service. They are considered transfers for less than fair value. Many of the cash transactions, because they are not traceable, will also be considered transfers for less than fair value. Unless Joe can document that these funds were spent on
When To Sell The Home
Dave called me because his dad had just recently suffered a stroke and was in the hospital but ready to be discharged. Dave told me, “Dad can’t go home. We’ve been able to keep a promise we made to keep him home but at this point the family recognizes he needs nursing home care.” I then asked him about Dad’s finances. “He has only $30,000 in the bank but he owns his home”, Dave said. “It’s not in great shape but we can probably net $200,000 after paying off his home equity loan. I’ve called a realtor and I am going to immediately put the house on the market so we can use the sale proceeds to pay the nursing home.” Dave figured the money would last 18 to 24 months and he would then apply for Medicaid. So we turned our conversation to the past 5 years. I explained to Dave that Medicaid will ask for and scrutinize Dad’s account statements over a 5 year period dating back from the filing of the application. “Did your dad make any gifts or draw out a lot of cash”, I asked Dave. That’s when he told me that Dad had
Terminal Illness and Chronic Care Rider – A Substitute for Long Term Care Insurance? Part 2
Last week I was sharing with you Mary’s story. She had been considering the purchase of a life insurance based long term care (LTC) policy to protect her against the cost of long term care. She was then shown a life insurance policy with a terminal illness and chronic care rider at a less expensive premium. Thinking that they will provide her with similar coverage for long term care, Mary asked me why she shouldn’t simply opt for the second choice. Let's examine this a little more closely. A big difference with the chronic care rider is that some of the riders require that the condition be a permanent one whereas other insurance companies offer riders which cover both temporary and permanent conditions. The one offered to Mary only covers permanent conditions which she did not realize until I pointed it out to her. Life insurance with long term care benefits covers both temporary and permanent conditions. This is important since people often tap into their long term care policies more than once before reaching the stage of needing substantial care for the rest of their lives. That may not be possible with a chronic care rider. Another important
Terminal Illness and Chronic Care Rider – A Substitute for Long Term Care Insurance?
Mary is considering the purchase of a life insurance based long term care insurance product, which she expressed an interest in after reading about it on my blog. Mary then said to me that her life insurance agent quoted her a premium on a life insurance policy with a terminal illness and chronic care rider. He told her that there is no additional charge for the rider and that she does not have to go thru underwriting to add it. She then asked me, " why would I need the product you're showing me? This is less expensive and seems like it would be easier to get." "Because they are not the same thing", I told Mary. "Chronic illness riders and long term care insurance are not the same thing. You need to be very clear on what you are getting and what is missing with the chronic care rider." Lets's first define some terms. A terminally ill person is one who has been certified by a doctor to have an illness or physical condition which can reasonably be expected to result in death within 24 months after the date of certification. A chronically ill person is one who