One of our readers sent me this e-mail, and asked me to post it. I know many of you have a lot of information to share concerning saving/losing/spending assets for the care of an AD spouse. I hope you can clarify the laws for this reader. Thank you.
joang
I have been reading the information on this site for several months now, and I have a question. I would like to know if any of the readers have divorced thier Alzeimers spouse and continued to provide care and love until they died. Given the enormous cost of ALFs and NH, how can the remaining spouse financially survive the long term effects? This is a drastic measure, but I am considering doing it. If I don't, I will lose my home, savings, and the home my grandchildren live in. My husband is stage 5/6 and has a very healthy body. He is 66 and I am 62. I have a little retirement and he has enough to provide care for him for a few years. We will most likely run out of money and not qualify for Medicaid due to the property. This is a second marriage for both of us (married 10 years). After researching the elder care sites, I discovered this is becoming a more common practice as people age. It is the last loophole remaining to retain any of your estate and the political establishment is working to get this stopped.
Have you asked the advice of an elder affairs attorney in your state. They gave us a lot of helpful info. But, I did work for Hospice in Pediatrics and I knew couples that divorced so they would be able to qualify for certain programs for their sick children. That is sad.
It is absolutely not true that a person would have to divorce in order to save their assets. In most all States a community spouse is allowed to keep the home, the car and all furniture and personal belongings. The community spouse is also allowed to keep one half of all other assets up to $104,000 (This amount might even have gone up since last I checked.) Example: you have $100,000 the community spouse keeps the Home, Car and other non countable assets, plus $50,000 which is one half of the 100,000, if you have $300,000 then the coummunity spouse only keeps the $104,000. In addition to all this, any amount over the allowable $104,000 that the spouse keeps, they are also allowed to purchase an immediate annunity with the remaining monies for any amount whatsoever, as long as the annunity is structured to be immediate, meaning paying out in monthly payments, it must pay at least the amount you put in within the lifetime of the community spouse and must not have a ballon payout. In most cases the Medicaid department must be the first beneficiary in the event that the community spouse dies before collecting the full annunity. This has to be set up according to the life expectancy of the community spouse and is set by a life expectancy chart that Medicaid goes by.
What about life ins policies and cash values? My SIL is concerned, she heard this will be considered as assets. Is there anything can be done not to have to cash in policies or have it taken away from you at death or before.
I don't know about anyone else, but being "allowed" to keep half of the non-house assets up to $104,000 if you've got enough invested to (you hope) carry you through retirement seems pretty silly. So, if for example, you have (random number) $800,000 in investments, you're going to have to deplete to $104K? That's pretty much expecting the surviving spouse to give up a secure future, especially if you're not expecting much in the way of SS or pension yourself.
Is divorcing a demented spouse even legal? Don't both have to sign papers agreeing to terms, etc.? I know a man in another state who divorced his AD wife, but the nursing home she was in came after him for his house and land, anyway, and it took years to get that matter settled. Unfortunately, I don't really know how it was finally settled, but he still has the house and land.
Emily, No, you do not have this right. After keeping the $104,000 you as the Community Spouse can then take the remaining investments and purchase an Immediate annunity for yourself, that saves the rest of the assets. The annunity has to be set up according to Medicaid guidelines and this is allowed. You would have to be sure it is set up correct and that is why you will need an elder law attorney to do this. You may pay an Attorney $5,000 but look what you save. This is only allowed for a spouse. Children cannot do this. It is called the improvished spouse law. The Laws are meant to keep Medicaid from also having to support a spouse. I just helped a friend of mine, her husband had to be placed, we were able to save all her assets by this legal method. In addition to this we were also able to save her Home, car, and a rental house she owned just because the land the rental house sits on joins the home she lives in. So there are many legal avenues that take care of the spouse. I also used to worry about this until I found out first hand there is no reason to worry. Don't ever apply for Medicaid until you see an Elder Law Attorney, if you do not have the assets to do this then ASK a case worker what is allowed and most of them will tell you the laws. I have found they do not mention the annunity though, it is something I researched and found out and then when we asked about it they said YES.
Pat, as far as Insurance policies. Term life policies are the only ones that Medicaid does not count. They do count the cash value of Insurance policies, term life has no cash value, therefore it is safe. We have Term Life insurance, I even worried about the value of the policy if Jim dies and I as the beneficiary receive the funds, I wondered if Medicaid would take these funds after his death, to take care of that WHAT IF worry, while Jim was still able to do so he signed the Term life policy over to me as owner, therefore if he happens to die before I do then the funds would not be in his estate and therefore no estate recovery. With an ordinary policy that has cash value even if you do have the policy transfered to the spouse at home the cash value is still considered assets. Hope this has helped
I also want to add this note to my posts. qualifying for help with the sick children is a complete different avenue in the Medicaid qualifications than when having to apply for NH long term care. in the above posts am speaking of Long Term Care. The rules are very different.
Also to the poster of the e-mail to Joang, just remember if you divorce your spouse, you cannot just transfer all assets to your name and then divorce them, they are not competent and therefore you would be considered doing something illegal even as a POA. In all divorce cases the other spouse is allowed part of the assets so you better think again before doing something like this. When using a POA it must be used to the best interest of the person you are signing for. Now using the POA to transfer funds to your name while as spouse with no divorce in the making is a complete legal avenue. You are trying to get ready to qualify them for Medicaid and transfers to a spouse in this respect are allowed.
Also remember when you divorce your spouse you no longer have the rights as you did when still a spouse. In most cases if you have Insurance from the place they were employed that will end. Even though you continue to be the caregiver.
A year ago I began the process of having the courts declare me my husband's conservator (guardian) as I thought it would make the financial end of things easier. Boy! Was I wrong. The process took six months and cost $2,000 only to find that we cannot even have a joint checking account any longer. Every penny of his money must be accounted for and must be for his care only. If I use his credit cards it must be for him only. I have to post bond every year. It's a nightmare. I imagine each state is different but that's the way it is here in Georgia.
Wow, Bebe...I have been my husband's guardian and conservator for almost eight years now. It did cost some legal fees, and I have to fill out a form every year for the courts, but his lawyer and our financial planner take care of all the nitty gritty details. We still have the same joint checking account we always have had...but I do have one separate for him and he has his own credit card that I use for his purchases, it makes the tracking so much easier. I have never had to post a bond....probably because I let the lawyer know that I wasn't going to do it. We have been married for 40 years...if I was going to take off with his money, I think I would have done it a long time ago....LOL! It really hasn't been that big of a deal for me. Of course, it entails legal fees every year to do the accounting to the court, but I have full control of everything that I need....and peace of mind, which is worth a lot to me.
Thanks Jane, It is so hard for me to understand. But If cash value amts or even face value amts are within the $104,000 I am okay. Unforunately my LO was disabled at 31 yrs old before we could get set for what we needed in future and we have nothing else for them to take. Not crying over spilled milk but trying to protect little we have.
Pat, be sure to read my post correctly. If you will notice I said the spouse can keep one half of the assets UP TO $104,000, You will have to have $204,000 in order for your part to be $104,000. If you have $50,000 then your part would be $25,000. ALL THE AMOUNT OVER YOUR HALF IS WHAT THEN CAN BE PUT IN AN ANNUNITY FOR YOU THE COMMUNITY SPOUSE LIVING AT HOME. So in all you really get to keep all of it. It is just the different avenues you have to take to keep it. Pat, the cash value of the life insurance would have to be cashed in and then calculated. The cash value is considered to belong to the owner of the Life Insurance, in which case would be your husband if you have not had it signed over to you as owner and beneficiary.
Bebe, You state that every penny of his money must be spent on his care. Are you still careing for him in the home? if so, you should be allowed to charge for this care, especially since you have to account for every penny and it must go for him. You need to look into this and start charging in order to return some of the assets back to you. You would have to have a contract and you as guardian are allowed to do this. Especially if none of his funds are being allowed to be spent on your expense.
Jane, I have worked it out by paying the mortgage and his credit cards out of his account. I pay the groceries, utilities and my credit cards out of mine. We have approximately the same retirement income so it works out. Just a hassle. For example I accidently used one of his credit cards once at a woman's shop and almost freaked out when I realized it.
I simply could not divorce my DH to protect my assets. Funny now that one of my sons encouraged me to just be a live in and not make my committment legal when I married in 1997. Yikes - I would have enough to live ten years past my husband if I could only keep $104,000,which wouldn't even be my expected life span. What I have in mind, if we need to use a NH - talk to my stepchildren about dividing our assets in half, with them knowing I would be spending down their inheritance. I supposed one would have to make that legal to be sure - but wouldn't that work if everyone is wiling?
Frand, you need to contact an attorney to get something worked out ahead of time. You would be surprised how "funny" people get when talking about inheritance and whose money is being spent. There are so many things to think about and having them in writing before the need arises could be a real lifesaver.
Sandi - We actually have a legal document worked out a couple of years ago. However, at that time I assumed/pretended I would be able to care for my spouse until he deceased. Now, I realize that is 'pie in the sky' thinking... You're right, I need to revisit this issue.
frand, Do you have a pre-nup? Medicaid does not even recognize a pre-nup, even if you do go to an elder law attorney. If you already have a trust set up and it has been more than 5 years, even with a trust if you are allowed control of the funds then they will make you liquidate it. If you do not have a pre-nup why in the world would you need to consult your step children. I may have missed some posts that you have made, but without a pre-nup the funds are yours and your husbands, not the children's inheritance. Inheritance is something a person gets IF there is any thing left after the primary couple are taken care of.
Sandi is correct, go to an elder law attorney, you will be surprised at what you are allowed to save. Even without an Elder law attorney just know that you as the spouse are allowed really all of the funds, go the Annunity route with the help of a good Elder law attorney. These annunities have to be set up in a special way and they are allowed by Medicaid.
Jane, no we don't pre-nup agreement. I always try to be fair with stepchildren, however - now I have two sets! Since I am over 15 years younger than my DH I am a little sensitive to stepchildren issues. I have POA and changed mine so my son would have that for me - can you imagine an AD spouse having to make decisions if I needed that? I suppose if we could know the future it would have been better to not co-mingle funds, but too late now. Anyway, this site is giving me reason to think it might be better to check with our attorney when we return to our home base in August. Thanks for your advice. I did already tell my DH's children what I had been told, "If you have a parent with AD you can kiss your inheritance good-bye."
We had our trust redone just one year ago. The attorney put everything in my trust. He said no problem. When I decide it is time that my husband may have to go into a NH , to contact him before I do anything and he would make some decisions on annuities. I didn't really understand what he meant, but after reading the posts on annuities I think I now understand.
He assured me he could save all our assets.
How do they treat pensions and social security when they go on medicaid?
Frand, it would not matter if you co-mingled assets or not. Medicaid counts all assets as belong to both husband and wife. Even with a trust although the trust owns the assets if you as the trustee have control to liquidate the funds, in otherwords if you can take any funds from the trust that you want to then they will require you to do so. Of course when it is a husband and wife you can take those funds to buy the annunity that I have spoken of in past posts so in reality you can save your assets it is just different avenues that you have to take to do this.
Joyce, the Nursing home will take your Husbands Social Security and his Pension income. You will not be able to save that at all.
Joyce, With Medicaid it depends on the state you live in. In California it is called Medi-Cal. The spouse can keep about $2600 of income, yours and his, the rest goes to the NH. California is very liberal (in many ways), they use the max. allowed for assets and income.
My trust was complete, my funds for the annuity we're cash and I was a week away from purchasing an annuity when Gene died. I did get good news from the lawyer. I get a full step up in cost basis on everything. California is a community property state. I thought since everything was in my trust I would lose out on the step up.
barbarakay, yes this is correct in all states, some states will only allow approximately $1,600 income yours and his. In other words, if yours does not amount to the $1,600 or 2,600 in your case then they make up the difference from his income to allow you this much. Generally a person with a trust will have enough income from the trust and other assets such as the annunity so that this does not allow any to be taken from the NH spouse social security or pension, that is the reason I said you will loose the Social Security and pension.
I think I'd rather change diapers than change financial plans! I THOUGHT everything legal was done, but now I find this is what I wake up at night thinking about. So, in August when we are spending time in our past home town I'll check with our attorney. Yikes - the way the economy is going $1600 might not be enough to buy groceries! As far as NH, we have a place in Texas that is a part of our full time RV group that offers 40 hours of day care and provides meals, a place to park our rig, etc. It was $900/month for all of that, but I think it is now $1200 - still a bargain. Volunteers keep down the cost and we all contribute to it through the years. They also have Hospice and nursing care there, for an extra fee. I also wonder how one knows with AD when it is time for Hospice, since that is supposed to be for the last 6 months of life.
I think I'd rather change diapers than change financial plans! I THOUGHT everything legal was done, but now I find this is what I wake up at night thinking about. So, in August when we are spending time in our past home town I'll check with our attorney. Yikes - the way the economy is going $1600 might not be enough to buy groceries! As far as NH, we have a place in Texas that is a part of our full time RV group that offers 40 hours of day care and provides meals, a place to park our rig, etc. It was $900/month for all of that, but I think it is now $1200 - still a bargain. Volunteers keep down the cost and we all contribute to it through the years. They also have Hospice and nursing care there, for an extra fee. I also wonder how one knows with AD when it is time for Hospice, since that is supposed to be for the last 6 months of life.
frand ... hospice can be started much earlier for AD patients than that. I just saw a post today over on the Alz Assoc discussion forum that said "These days, to qualify for hospice, they require a 'diagnosis which the patient isn't seeking a cure for' (such as taking chemo for cancer.) We know there's no cure yet for dementia, so that qualified my Dad."
I'm not sure it's quite that simple, but I do know that there are several threads there which talk about the fact that AD patients can, and should, start hospice much earlier than they usually do. There are four recent threads on the Caregivers Forum I found that you might want to check out:
- Hospice- just so you know - What exactly does hospice do? - Joyce43 - Is it time for hospice?
Well, this post went to cyberspace, so I'll try again... Sunshyne, Thanks for your comments. I have used Hospice for both my previous spouse and my Mom, so I am very familiar with the services. I just wasn't sure how it works with AD. It seems when you get to the last stage it would be appropriate. I'm wondering if anyone who posts was able to care for their LO at home until the end? That is definitely what I'd like to do, though one never knows until that time comes if it will be possible...
Frand, I took care of my husband until he died three weeks ago. Actually, he lived in an AD facility for two years during the worst part of the disease....the times when he was angry, loud, uncooperative and scary. When he became bedridden and unable to do anything for himself I moved him back home. It was easier for me than going to a facility every day and spending most of the day there and also doing most of his care because I was there. I figured I could do it at home plus save $7000/month.
If you can learn to change a bedridden person and don't mind the daily grind of total care, it can be done. I was able to get out and about because he was totally bedridden and slept almost 24 hours a day. I could leave and run errands, go to the movies, go to lunch or dinner and visit with friends. I also had good help to come and bathe him twice a week and who would stay when I went out of town.
When he developed pneumonia in February I called in Home Health nurses and then Hospice and they were wonderful the last month of my husband's life.
After 11 years of AD, I was so happy that the end was a peaceful one and that he is no longer trapped by this terrible disease.
Sandi - Thank you for letting me know it is possible to care for your LO at home. I took care of an aunt many years ago and did all the bed changes, etc., but she was dying of cancer and I only did that for 8 weeks and I was in my 30's! It just seems like AD last so long, but knowing that you were involved for 11 years and survived helps me think it CAN be possible. I so hope you are getting a good rest now and finding life after AD.
i also thank you for the input on caring for them at home til the end. that is my idea as well but if things were to change and i had to intern him i would but would probably bring him back home if hospice were called. i salute you for your resilience and hard work doing it myself i know exactly how hard it is. divvi
frand, I don't know what stage your loved one is in but I also wondered the same thing about Hospice. My husband can no longer speak, has not been able to talk in almost a year. cannot eat without assistance, (I have to prompt and remind as he puts down his spoon and pushes his food away several times during the meal.) cannot dress himself, is totally incontinent, has to be prompted and led where to walk, (can ambulate but not without prompting and showing) cannot bath himself. I called Hospice as was surprised to learn he already qualifies and we were signed into the program on April 3. They explained to me it is different for an Alzheimer patient. They will re-certify him in 90 days and again in another 90 days, and then in 60 days. If he shows a decline during those times we will get to keep them if he does not, then we loose them and the first decline he has they will be back. Even weight loss is considered a decline. I also am planning on keeping my husband home all the way through this disease if at all possible. I do know of many people who have done so.
You will not be able to do it without help but with help you can.