My mom worked as a Nurse Anthestist until she was 74. Making over a 100k a year for the last 20 years of her career. She was always frugal and built up a very nice estate. Rock solid stock investments that were tax sheltered in a Trust.
What happens if she eventually goes to a Nursing Home? Can they drain every penny from the estate?
Does the Trust offer any financial protection?
I will inherit the annual income from the Trust. But can’t access the principle. Mom and Dad designated that it goes to charities they selected after I’m gone.
But, I’m concerned just how much a nursing home can charge? Does Medicare pay most of that?
I got a long term care policy at my job. I don’t think mom ever got one. I don’t think these pay much anyhow.
What’s been your experience in dealing with Nursing Homes?
In my family, we had a mother-in-law in nursing care for over 10 years. Final monthly tab was close to $10,000, in a memory unit. Medicare paid nothing for the nursing home, just regular medical treatments.
If she had run out of money, she would have had to move to a facility [del]hellhole[/del] that accepted Medicaid, for which she would have been qualified.
It is not so much that the money is “drained” as spent on care. The nursing homes are a business, not a government service.
Medicare does not pay for long-term care. They will pay certain amounts for rehab, so a short-term stay in a nursing home after a fall, etc., is likely covered, but that is time-limited. If she develops Alzheimers or some chronic condition requiring full-time care, Medicare will pay next to nothing.
Nursing home care varies widely in price depending on region, type of home, type of care needed, etc.; the national average is around $6200/month for a semi-private room. Medicaid (public health care funding for low-income individuals) will pay for nursing home care, and in some (most?) states for various forms of home health and assisted living, but to qualify for Medicaid your mom would need to meet the asset test–no more than $2000 in “countable” assets. Exactly what is a countable asset varies from state to state, but a revocable trust or a trust in which the principal funds are available for your mother’s use would be counted pretty much everywhere, so she’d need to spend down all of her assets before the state funding would kick in.
Certain forms of irrevocable trusts DO shelter assets, but the rules are strict and vary somewhat in each state, so talk to an experienced attorney in HER state to find out what options might be available.
Ideally the Nursing Home would take all the annual income from the Trust. I could sell her house and car. That would pay for a year or two of Nursing Home care.
I’ll eventually need to talk with her lawyer. Thankfully, Mom’s still independent for now. But I’ve seen a big change in her health just in the past two years.
This may not help the OP, but there is something called Long-Term Care Insurance Partnership Policies that allow someome to keep an amount equal to the insurance benifit rather than spend it down to $2000 before the state Medicaid picks up the cost. Not all states have such partnership programs.
The estate is earmarked for various charities mom and dad picked out quite a few years ago. My mom scrimped and saved her entire life to put this estate together. Even working quite a few years past her retirement age.
I wasn’t sure if Medicare paid for Nursing home care. It’s good to know they’ll pay for a short stay.
Nursing Homes are something we will all face eventually unless you’re lucky enough to pass after a brief illness. There’s no way of predicting the future.
Nursing homes (otherwise known as skilled nursing facilities, or SNFs) provide a medical level of care. If that medical level of care is needed, Medicare will cover it so much. If there’s not a necessity for a MEDICAL level of care (no infusions, just needs help bathing, etc.) that would be the assisted living (ALF) level of care. Those cost much less, about $3000 a month minimum (in areas I’ve lived in, probably much higher in the Northeast, etc.) Those are where means testing comes through, and you can no more than $2000 in assets. As stated before, the government doesn’t kick in until you’ve exhausted all of your own resources, and they care very little for what inheritance you leave behind. Not at all, in fact. I think people get frustrated by this, “I worked so hard for this my whole life!” Yes, you did, and that’s why you’re able to care for yourself in your old age.
We’re going through this exact thing with my grandma right now. I’m a social worker who has worked in the healthcare field. My cousin, also a social worker but who works in social services, just cannot understand why the government won’t pay for her to continue to stay in a SNF (see: medical necessity.) I won’t even get into PASARRs, but look that up if you’re interested.
Boy, I don’t get this attitude. Why should your mom get to give the $ to charities, instead of on her care? Why does it matter if they are “charities”?
If someone doesn’t want to use their assets to pay for their own eldercare, then they should work on finding someone to help them commit suicide. Or simply stop eating and refuse care.
I know this sounds harsh, but I really don’t understand why anyone would think that someone’s assets should NOT be spend on their end-of-life care.
My mom broke her back a couple of months ago. Like your grandmother Medicare paid for skilled-nursing/rehab, conditional upon her making continuous, documented progress in her rehab. If she stopped making progress, Medicare would have stopped paying - at which point she would have been transferred out of the rehab place into a long-term skilled-nursing facility, on her own dime.
Ultimately she improved enough that she and my dad were able to move to an assisted-living facility, which is substantially cheaper than skilled nursing. One of the most basic criteria for deciding between the two service levels was whether you needed one person to assist you, or two; if you only need one staff member to assist you getting in/out of the shower and on/off the toilet, you are qualified for assisted living.
Again, Medicare will only cover a short stay IF it’s for rehab, and IF she makes continuous progress. For indefinite stays that aren’t rehab related, your mom will be paying out of pocket at the facility of her choice. If she’s very nearly broke, then Medicaid (which is different from Medicare) will pay, but only at certain facilities; these facilities are unlikely to offer a pleasant existence, and there is a fair chance that they won’t be conveniently located.
Non-Medicaid skilled nursing is quite expensive. The saving grace, depending on your perspective, is that if you’ve transitioned permanently to skilled nursing, you probably won’t be there for long; there’s a 65% chance you will die within a year.
The baby boomers represent a massive number of people who are already approaching 70.
I’m hopeful that facilities for seniors will improve. Open more assisted living facilities that offer limited nursing care. That cuts the cost compared to a Nursing Home.
Perhaps better insurance options too. I know my long term care policy has set limits on how much they’ll pay.
The baby boomers have shifted society through out their lives. It’ll be interesting to see how services for seniors improves in the next decade. I recently joined AARP and they lobby hard for Seniors.
Slight correction: The first boomers are already over 70.
As I used to tell my younger co-workers before I retired: We made our parents build schools; we will make our children and grandchildren build us retirement homes. There are more of us than there are of you, and we vote. Get used to it.
To the subject: Another option is a continuing care facility. You buy into it while you’re still healthy and can take care of yourself. You opt for either an apartment or, sometimes, a standalone little house. There’s usually a cafeteria, laundry service, etc. that you can use or not as you wish. If/When you need assistance you can change to assisted living. If/When you need full care, it changes again to provide that. But you’re still in the same location.
