Long term care for Dad - how to pay?

jrdavid68 · 01-23-2006, 10:30 AM

Long story short, Dad is now in residential care at a nursing home with no long term care coverage.

Liquid cash (checking and savings) will run out this summer.

Current income consists of an annuity and social security - the total of which doesn't even cover his Med. Ins premium and prescription drugs. The new Medicare drug coverage goes in to effect for Dad on 2/1 so hopefully that will actually save him some money each month.

Three sources of money moving forward:
Other Annuites - total value would carry him for about 1 1/2 yrs
IRA (CD's) - value would carry him about 2 1/2 yrs
Normal CDs - no significant cds maturing until mid 2007

I guess my question is whether it would be better to pull from the IRA (he's 76) or annuities and take whatever the tax hit might be now, or leave that money where it is and cash in some CDs early and lose some interest?

No matter how we slice this, if he stays where he is, we are looking at maybe 6 or 7 years and he will be out of money and the state will need to take over.

Suggestions from the Pelican Brain Trust are very welcome!

Thanks,

Craig 930 RS · 01-23-2006, 10:34 AM

Well, you did ask, so here ya go:

Whatever you do, try to 'hide' some of the $ so the state will have to pay earlier...one great way is to fix up his home with the $. My in-laws did it.

Milk it, better than $ going to the home - let the state pay.

RallyJon · 01-23-2006, 10:38 AM

Quote:

let the state pay

By "the state" you mean all the people who live in that state, right? All the hardworking people, paying taxes, and setting aside money every month to pay for their old age?

Sounds like JrDavid is doing the right thing, here. Why try to talk him into a welfare scam?

Moses · 01-23-2006, 10:39 AM

Any other assets? Does he own a home?

Craig 930 RS · 01-23-2006, 10:44 AM

Not a "welfare scam". Welfare has zip to do with it. Fix up his house - id he has one. He may come back. Its legal, ethical and a better use for the money.

He is speaking of money management, and this is a way to accomplish that.

jrdavid68 · 01-23-2006, 10:45 AM

Craig911 - I appreciate that. However, I walk a fine line when it comes to stuff like that. I must abide by my what I feel my Mother would have done.

I have full POA for Dad, but my Mom would never have "hidden" money like that. She would consider that "cheating". Whether I agree with that or not, it was basically all because of her that Dad has anything now anyway.

Also, if I am "hiding" the money and Dad stays in the home, aren't I just trying to save it for my brother and myself?

I have "Gifted" some money to an account at Dad's bank that is in my name, however, that was really to make sure there is enough money left over to pay for funeral expenses and the like when the time comes. Mom had been looking in to pre-paid funeral stuff just before she died and I figured this would accommodate that.

Moses:

Yes, he does own a home. Unfortunately, where he lives it's probably worth about $60K at most.

Keep 'em coming.

jrdavid68 · 01-23-2006, 10:49 AM

Craig - the house could use a few things like new carpet etc. I may talk to Dad about that as that in itself does not seem to me to be "cheating" and now would be a good time to do it. That was also part of my thought process with the "gift" account I mentioned above to have some cash left over to do a few upgrades to the house when the time comes to sell it.

There is a slight chance that Dad could go back home. However, everyone involved (even Dad) agrees that he is better off where he is now. His concern, of course, is the money.

Craig 930 RS · 01-23-2006, 10:50 AM

Open 529s for people he loves. THAT would be THE smartest thing to do. Frankly, I do not want to hear opinions on this - this is for Dave.

BGCarrera32 · 01-23-2006, 10:59 AM

>>1986 911 Carrera<<

Craig 930 RS · 11:02 AM

In what actual way is he concerned about the money?

Let this alone be your guide as to what you do with the money he has.
My father would have been beyond pissed if his hard-earned money went away when it could have been for his family. So, we took care of things with that in mind...

Dave - If you wish, PM me - unfortunately I have considerable personal experience with this exact sort of situation.

EdT82SC · 01-23-2006, 11:24 AM

Quote:

Originally posted by Craig911
Well, you did ask, so here ya go:

Whatever you do, try to 'hide' some of the $ so the state will have to pay earlier...one great way is to fix up his home with the $. My in-laws did it.

Milk it, better than $ going to the home - let the state pay.

With an attitude like that no wonder our government is always in debt and raising taxes. So Craig, do you b!tch when they raise your taxes? You certainly don't have the right to.

When my grandma had to go in a home a financial planner suggested we hide her money so the state would pay. We reported him to the state, and then paid for her care with the money she had saved.

The state will provide care after all of your Dad's money is gone, but the places the state will pay for are the cheaper ones, and the care can vary a lot. If you have to go that route choose his care facility carefully.

BGCarrera32 · 01-23-2006, 11:26 AM

Quote:

Originally posted by Craig911
Open 529s for people he loves. THAT would be THE smartest thing to do. Frankly, I do not want to hear opinions on this - this is for Dave.

Well tough cheese. You're on the internet so get used to it.
The question I think, unless I misread, was how to afford his long term care, not generate income for his kids from a 529.

How about renting the 60k house for x dollars a month? What are his long term care costs? Is the house payed for? What are your tax advantages here? You need a comprehensive plan to cover your options by seeking the advice a competent RE advisor and estate planner.

vash · vash's Garage

damn. for those of us with this way down the road, what about long term care insurance? my gig, has the option for me to buy it for my parents. good deal?

930addict · 930addict's Garage

Just went through this with both of my grandparents. We sold off all of their assets (several homes in Downtown San Jose), the money went to some sort of fund (don't know the details on this). The kids withdrew $9000/month to support both of them. This was enough to cover the expenses for 3 years. They both passed away within 6 months of each other. The remaining money was divided among the kids and grandkids.

Craig 930 RS · 01-23-2006, 12:24 PM

My estate planner advised me to do exactly what I have advised here. I answered his question - how to afford - WHILE being intelligent and using resources. Such as a brain. So eat that with your cheese, BG.
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And as far as this:
"When my grandma had to go in a home a financial planner suggested we hide her money so the state would pay. We reported him to the state, and then paid for her care with the money she had saved."

Well goodie for you. The 'hiding' is legal - dunno about your planner, but my planner is legal - as is the advice I gave.
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Like any meds, ultimately take 'em as you wish, but there are pfeferred methods than letting $$$$$$$ go away unnecessarily.

Be smart & legal or fritter away. It's a choice.

930addict · 930addict's Garage

My work offers longterm care benefits too. If I buy into it now it would be 157/month for comprehensive lifetime coverage with a $250 per day max. This also has built-in inflation protection. I can sign anyone in my family including siblings and parents and it is taken out pretax so it lowers my taxable income. Do any of you guys have this covereage? How does it compare. Is this a good deal?

tabs · 01-23-2006, 12:37 PM

Isn't JRdavids Dad entitilted to the same thing the illegal aliens get...

I say hide evertything you can and take advantage of everthing you can...because if you don't your Moms and Dads lifetime of work will be for nothing...the money can be used to educate your own children instead of going to the state to educate an illegals kid. Socialists in Amercia want you to have nothing...

We live in an imperfect world and the operative credo is to defend yourself at all times...thats what they tell a Boxer when he steps into the ring...

Craig 930 RS · 01-23-2006, 12:47 PM

That would make too much sense, tabs.......
But it is what my family did. Legally. With my parents' wishes.

jrdavid68 · 01-23-2006, 12:52 PM

Quote:

Originally posted by Craig911
My estate planner advised me to do exactly what I have advised here. I answered his question - how to afford - WHILE being intelligent and using resources.
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Technically, my question was which source of funds to tap first, the annuities, IRA or CDs. The first two will have some tax consequences and the CDs will have an interest consequence.

Renting the house isn't much of an option. Probably at most we could get $300/month or so. There is a chance Dad will go home and as long as he thinks that - he won't rent it or sell it.

The house is paid for and the $60k estimate is very optimistic. Selling as is in a hurry might require selling it in the $40K range.

This is in the middle of nowhere in the Midwest. His house in my neighborhood would probably be priced at $750,000......

tabs · 01-23-2006, 12:56 PM

I'm not advocating doing anything illegal, but using the law to your advantage instead of the States. The idea is to preserve as much of their hard work as you can for your family...to make your life better than some illegal aliens.

Jrdavid needs the advice of an attorney/accountant so that he can proceed in an informed fashion.