Why is it always a goal to put aging loved ones on Medicaid?

At some point my mother kept talking about this attorney and needing to do something. I had no idea what it was about, but finally got the name, did some lookup and contacted them. At the time he was one of not very many well-versed in the Elder Law field. By the time I called, he wasn't actively participating, but rather involved in training others in Elder Law. They referred me to another atty. He set things up so that my mother wouldn't be destitute if dad needed care. Once he was in NH, they took his SS and his very nice pension. Had we not done something, she would've had to pay out of pocket and would have little or nothing left for herself. I still didn't understand the whole process, esp since she was very nasty to me and I backed off participation. After he passed, she was getting a stipend from the trust, her share of his pension and her SS. She had a decent income, but chose to close out the trust (unbeknownst to me!) and put it into CDs. Probably lost a lot of interest income in doing that! She also gave each of us 3 kids distributions once or twice. I still had no dealing with any of her finances.

When she developed early dementia, I contacted the atty and we redid some of the original documents and set up a trust. She'd been talking about giving us money again, but I stopped that. He put her condo into a life estate and I was able to close her CDs when they matured, and put them in the trust. IF she could've stayed in the condo long enough, it would've reduced cap gains on sale, but she refused to let aides in and we had to move her to MC. Cost of keeping it was expensive, so I worked on clearing, cleaning and repairing so we could sell it. Most of the $ went into checks for us (Remaindermen), but we put it all back into the trust, taking back enough to pay the cap gains we were assessed. Her share also penalized her for Medicare, as they also have a look back - tax guy says this will revert back again next year, as her income is back to "normal."

The benefit to this, IMO, was to protect her assets from herself or scams. It's in an awesome management such that despite taking so much every month to cover the cost of MC (even more before condo sale), if you look at the 2 year graph, it's like we haven't touched it! There will be plenty for her care for years to come (she's 97 now, almost through 4 yrs of MC!)

What I wasn't aware of is the "plan" was to protect the assets and use Medicaid, should she ever need a NH. After the condo sale, the atty told me to contact him if/when she needed a NH and he'd help apply for Medicaid. So, apparently the goal was to protect the assets to leave something for us. Nice as it would be, that is HER money and should be for HER care. I made my decision to NOT call if she moved to NH. Turns out in discussion with her MC is that she won't need to move. She has DNR, doesn't want excessive treatment, etc. She recently had a stroke, but even if she becomes bed-ridden, she can stay! It was my preference to not have to move her, so it sounds good for now! Even if she did have to move, my plan is to pay for the NH from HER funds. Anything left, great. If not, so be it.

As I noted to rovana's comment, there is "talk" of changing the "rules" so that the 5 year lookback is either extended or eliminated, to prevent this kind of inheritance "saving." Of note also, many insurance companies have gotten out of or plan to eliminate further LTC policies, as they are not profitable, esp when people can live for MANY years in LTC! If you have one now, make sure the ins co is still solvent, and if you plan to get one, make sure it is a co that is big enough to "ride the storm."

So, estate planning CAN be beneficial for a spouse or disabled LO, but really shouldn't be used to avoid paying for LTC and depleting the Medicaid program. In many cases on this forum, there are those who don't have enough savings or income, who aren't trying to hide anything, but need care. Then it's legit recommendation.

Assisted living and total care facilities are expensive. In Hawaii, where my MIL lives it would cost the total of all our earned income every year to pay for her care. Her assets are liquidated and she has life insurance pay-out from FIL when he died to care for her in her home with 2 live-in caregivers. If/When the money runs out, then we'll have to have a different plan. Since she is in her 90's, the money will probably be just enough.

I had this discussion with my POA yesterday. I continue to save $$$ should I need assisted living or skilled nursing care (I’m 71). Hoping that with my small pension, SS, long-term care insurance and savings, my care will be paid for out of my pocket. I have a term life insurance and a retiree death benefit plan with my POA listed as beneficiary (who will become executor of my estate). The latter two will never be touched by Medicaid, should I run out of money, because they’re term life plans (my term life plans keeps its face value to age 100 - not likely I’ll live that long). So, my executor will get those funds as gratitude for the work he does on checking on me now, managing my affairs if I become incapacitated, and handling funeral arrangements and estate issues.

i made sure my POA (I have no children) knows that I absolutely don’t want to be on Medicaid if at all possible. I’ve seen three on-Medicaid seniors crammed in a small room in a skilled nursing home. That’s not how I want to live out my last days! I have no idea why folks want to do estate planning so their life savings go to their heirs and the government pays the tab for their care. The three-to-a-room is probably not what they imagine when thinking the government will take care of them. It was horrifying to see three elderly men (all groaning in pain in a facility short on help) with a foot of space between each bed. They were a miserable lot. So sad! Seniors with any means should use their savings and investments for their own care if at all possible. Plan ahead! Senior care can be costlier than college! I feel for those who must depend on the government for assistance. Some will get good care, but others will get very little. Breaks my heart.

"Hiding" assets to protect them for inheritance and using Medicaid is a very touchy subject. There are those who save, are somewhat frugal and use their assets for their care when needed. There are those who don't save who could have, and blow though everything, and then have nothing for their care later. There are those who never truly make enough to save for their future needs. Then there are those who did save, but having LTC for one has depleted savings, leaving the spouse out to dry later! While protecting assets is a useful goal to protect a spouse or dependent child, it has become more of a way to protect assets to allow some to pass their savings on to their children.

Medicaid should be for those who truly need it, those who never had the opportunity to save enough for the high cost of care. But, those who blow through it aren't denied necessarily. It isn't fair to those who were responsible, but life isn't always fair, is it? It's just sad that we ALL pay for those who use Medicaid (through our taxes) and when those who COULD have saved, without scrimping, didn't and use it, it takes away from those who really need it!

Tholden627 says:

"The one I care about is my younger brother who is disabled. I just want her to have a comfortable life. Definitely going to look in the home trust, because I wouldn’t want the state to decide how much it’s worth"

THAT is a legitimate reason for doing estate planning and setting up proper trusts. By doing so, your mother has ensured he will be cared for in the future, better care than he would likely get via Medicaid. Your mom was a wise woman at the time, to look ahead and be concerned for your brother!

"As for my brother, my mom back in 2016 worked Thoroughly with a very prominent special-needs lawyer/ estate planner.
He has proper trusts set up for him with me as POA, Got all the proper assessments so he could qualify for certain funding, as well as Medicaid and Social Security.
When my mom started to decline, his plan went on the back burner, so I had to rummage through notes to figure out what she did. After some digging, I was able to pick it back up with social workers and after five months of working hard he’s getting very close to having his future set."

You clearly learned a few things from your mother, picking up the pieces and making sure her wishes for his care come true! If he lives in the same home with your mother, Medicaid can't take the house while he's still alive/living there. It would likely be best to set up something with the attys such that Medicaid can't take it, if possible to do that now.

Can't fit everything in here, so I'm going to post what we did next.

THolden, your family is very blessed to have you.

My prayers are with you for getting everything sorted and finalized for your mom and brother.

Remember yourself as you deal with all of this. Taking time off when you need a break is so important, take care of you so you can be the best you for them.

You are doing a great job! Well done!

Her money is for her care. Medicaid does serve a purpose if there isn’t money saved.

Parents should not have to provide for adult children.

Louisiana used to have ‘forced heir ship’ laws. I’m glad that was voted out awhile back.

My parents refused to seek financial counseling when they sold their first house. My sister and I begged them to get some help and plan. They spent what they wanted and now mom is alone with very little savings. We will be looking at applying for medicaid in the near future. We have no other choice. Often people do not make any plans for retirement. This is the case with my mom and I'm sure many others. .

You are quite correct that LOs assets should be spend on their care and comfort. Really that should go without saying. The reason you see so many questions about Medicaid qualification is that these days elders are likely to live longer, live with chronic conditions requiring extended health care and very likely to outlive assets they may have had. Usually it is only very wealthy people who are able to cover living expenses and medical care as they age out of their own resources. So families facing this issue know that Medicaid is certainly needed and very shortly. I suppose, to be blunt, the advantage of Medicaid is having not to huddle under an overpass.

I paid within a few hundred do;Lars of a million to care for my mother, over about 5 1/2 years’ time, in the best nursing home setting I could find.

It was her money, my father had made it, and that’s what he would have wanted.

Had she lived much longer, she would have gone on Medicaid after all of her assets were expended.

I never regretted handling the situation as I did.

My very LAST option would be to have to go on Medicaid.
I have saved for my retirement and I have purchased Long Term Care Insurance just so that I can make decisions about who cares for me and where.
Most people have not taken steps to do so.
For some odd reason so many people want to "pass the house on" to a family member. So a house is put in a Trust so that it can not be used as an asset to provide the care one needs.
They want to pass on all the money that they have saved for "their retirement and old age" well guess what it is time to use that savings for what you intended.
"WE" put so much on possessions that we fail to see that the very things that we have can help provide for better care.
Use what she has to provide the BEST care she can currently afford.
When and if the funds run out then you can begin the process of applying for Medicaid. But until then let her have the best that she can afford.
Although when looking for a place if you are going to have to place her in a Facility look for one that will also have Medicaid beds should she need one. A resident that has been "private pay" for a number of years will have a better chance of getting one of the Medicaid beds that the facility has.

The goal of medicaid planning is asset preservation. Certainly if one's LO has no or few assets, they must apply for medicaid if they want any medical care. Those with significant assets may want to pass some of those assets to children or grandchildren. You asked what the benefit is to the aging loved one. The benefit to them is that their wishes are honored. Certainly we all agree that each of us is responsible for the cost of our own healthcare but may also feel an "obligation" to pass money down for personal reasons, e.g., help pay the cost of caring for a disabled grandchild. So those who have significant assets, can create an IRREVOCABLE Medicaid trust that takes ownership, control and access to their money out of their hands. If done properly and with the proper lead time (lookback period), it becomes Medicaid exempt and is not susceptable to estate recovery. Of course money outside of that trust must still be spent down to the appropriate limits. Every state has it own rules so hiring an attorney to do this is critical. The money in that trust is solely for the benefit of the LO and can be used for his/her care. So I agree that everyone should pay for their own healthcare, but it may come in second to grandma's desire to pass money down to the family.

The fact is, not everyone's retirement will cover much in the way of long-term care. That money goes fast when it's self-paid.

My folks' house was paid off, and my dad did an excellent job of saving and investing for their retirement, so now that my mother is in memory care, she's able to pay for it with existing funds. However, it also costs more than twice what she and my dad were living on when it was the two of them at home. It's costing her about $150,000 a year now between her nursing home bills and her medical expenses.

Not a lot of people can afford that for too many years, so I'm sure that's why there's usually a discussion of Medicaid.

You are correct, her money should be used to provide her with the best possible quality of life.

Many people are looking for ways to hustle the system and get a fat inheritance while their parents are put in a nursing home and many times just forgotten.

I can't personally imagine worrying about getting the house I want and was promised if it meant that my loved one had to go on welfare for me to receive it. But it takes all kinds to make the world go round.

Because your mom has a disabled dependent adult child I highly recommend that you go to www.nelf.org and find a certified elder law attorney in your area and have them help you. He needs to be protected as much as mom, they will be able to help you ensure that he is taken care of in the event that mom no longer can.

I was cheering your post, hustling the system is a hot button for me. I have seen people that needed the aid and could not qualify while others that didn't need it shielded their assets to qualify. The lack of integrity that takes is gut wrenching and the ones that suffer are the ones that didn't have anything to hide.

God bless you on your journey, may you find a great attorney and be filled with strength and wisdom.

Great question. I believe the assets are saved for one’s care, not to leave as inheritances and not sheltered to be able to go on Medicaid. Medicaid should be the last choice after all assets have been liquidated. Prepaying for a funeral and final expenses, new glasses, hearing aids or other needs can be spent.

My husband and I have saved from the beginning of our marriage for our retirement. And many times we saved, when it would have been more fun to spend. Now that we’re retired we have the money to maintain our same lifestyle, maintain our house, pay for future care when needed, and hopefully do some travel.

If you want give away money do it earlier Same with transferring ownership of a house.

I think what you are reading is how to plan your retirement with Medicaid as an option in your future.

The money we have saved is to go towards our care. But if I planned on staying where I am, I would put my home in a Trust. Because having my Moms home to care for and having Medicaid involved with how much I could sell it for was part of my stress. With a Trust my girls could do what they wanted with the house.

You are correct. Moms money should be used on Mom. Maybe for a nice AL. Medicaid only covers LTC facilities. ALs maybe after private paying for a period of time. When your on Medicaid (its not a coverage) you are basically poor. SS and pensions are used to offset the cost of care. Before my Moms death and just after she was placed on Medicaid, she was put into a 4 bed room. TG she wasn't kept in there all day.

When you protect your money that just means your beneficiaries profit from your savings. Me, I want to live my life out comfortably. I hope we have enough saved for a nice AL. I do not want to be in a NH for the rest of my life so my children reap the rewards of my hard work when there were other options I could have afforded.

I think you are mistaken in how Medicaid works. There really is no way to "protect" your assets from Medicaid UNLESS you give away your money (presumably to a family member) at least 5 years prior to needing Medicaid. If you have money, and need long term care, your money is going to pay for that care before State Medicaid pays. Or, if you've set up trusts that are needed to qualify for the care that you need, Medicaid will recover from those trusts upon death. The protection that you are seeking when consulting with attorneys or Medicaid experts is protection for your spouse to remain in the home, or setting up an income trust to qualify for Medicaid if your income exceeds State guidelines. This isn't cheating the system because the State will still get the money in the end anyway. The only way you can "cheat the system" is if you transfer your assets or give away your money 5 years before needing any kind of Long term care. There is no other way. Other than that, advice on how to qualify for Medicaid is geared toward structuring the money to comply with State laws. The State will still be satisfied financially in the end.

I think what you are missing is that most people do NOT have savings to cover ALF and LTC facilities. Some have saved all their lives; most have no. Assisted Living where my bro was ranged from 3,000 to 6,000 per month. Most Seniors don't have this kind of money. So their money is gone in old age and
OF NECESSITY they need Medicaid. Trust me, there is a good deal of difference in where you can go and what care you can receive from having adequate savings to having non and being at the mercy of the taxpayer. It is nothing someone would choose.
We do see on Forum a FEW instances of people trying to hide their assets, gift homes to children, come up with some scheme with some laywer, and then try to get taxpayer funding through medicaid, but it is RARE as hen's teeth. We see more who mistakenly gifted to children, paid for college, a down payment on home, and then the funds were gone when they were needed.
You are so correct in that we should all save everything we can for our own care when we are aged, and that is how those funds should be spent.
As to information packets you are handed, they are usually freebies handed to EVERYONE whether they need it or not. It is public information provided by providers.

I am in Canada, Sammy family is not involved in Medicaid or Medicare.

I do believe that education around the rules for qualification is very important. Not a week goes by that there is not a new post from someone looking for help, but the family is within the look back period, because Mum sold the house, moved in with the kids and gave each of the kids a lump sum of money. That sounded good until dementia set in, or Dad had a stroke and needs 24/7 care.

Many people make grand promises, “the house goes to my daughter, the car to my grandson...”, without considering the consequences of their actions.

I know for my former mil, being able to leave money to her sons for her is a sign of success. She grew up incredibly poor.,

It’s very true that a person’s assets should be used to pay for their needs and care. Also true that Medicaid is a government program that helps people who can’t afford to pay for care. I personally don’t believe in inheritance at the expense of public funds, to me that’s misuse. Others see it differently. In our family, my mother’s care post stroke quickly burned through what we thought was an excellent long term care policy, private pay wasn’t sustainable for the long term, and Medicaid was done to avoid bankruptcy for my dad. When you consider years of nursing home care at over $140 a day it doesn’t take long to break a person. My mother’s SS always went toward her care, but the rest simply become too much