Avoid Nursing Home Poverty And Spend Down - Jane's Story

asset protection crisis planning elder law nursing home nursing home medicaid Jul 02, 2018

Avoid Nursing Home Poverty & Spend Down - Jane's Story

The story below has been changed in order to protect the client's confidentiality, while retaining the truth of the details.  While the Family & Aging Law Center cannot guarantee results, we can say that the results below are typical for our office. 

Video Transcript:

Hi everybody, Attorney Nicole Wipp here with the Family & Aging Law Center.

So, today, I'd love to share with you a story about our client, Jane (*not her real name!). Jane, like so many of our clients, needed nursing home level care. Yet, her family was so scared - because they did not know what to do, just like so many people don't know what to do. They had been being told, "you HAVE to do a spend down, you have to spend down her money to $2,000 before she can receive benefits for care...she can't have two houses (which is what she had). She can only have one house! You've gotta sell one!" All of these things were being told to the family, all coming at them, right left and center. They didn't know what to believe.

Jane's Adult Son Contacted Us For Help: We Were Able To Save $177,681.15 + Her House

Well, luckily, her adult son, Bill, found us, and came to us and said, "What can we do here? We're being told that this is what we have to do, but I feel like there's something that I should be able to do, what can you do to help me?" What we did was we put in place a strategic - and perfectly legal, by the way - plan to preserve some of Jane's assets. And, by the time we were done, of that $300,000 pot that Jane started with, we were able to save $177,681.15 plus her house.

The Planning Is Complex: But Handling The Complexity Is Our Job, Not Yours

Now, I don't want to get into the nitty-gritty of how all this works, because to be quite honest with you, it's complicated, and you know, it isn't your job as the consumer to understand what I as the lawyer do for every step of the way... but what I will tell you is this: that there ARE strategies that we can use to save money, and we do them every day here in this office the Family & Aging Law Center.

You Don't Need To Sacrifice Your Loved One's Quality of Care

All of these strategies are perfectly legal, like I said, and we can get them in place very quickly so that you can avoid a spend down! This doesn't mean that your loved one needs to sacrifice their level of care. In fact, Jane - one of the big considerations that her family had, was that Jane needed a specialized type of care in the facility that not all facilities actually provide, and if she wasn't able to stay at this particular facility, she would have ended up somewhere that the family did not want her to be.  Learn more about Elderly Care here.

Gifting Money: Avoiding the Penalties

The other problem that Jane had, that a lot of families have, is that Jane had been giving money to the family over the course of a couple of years prior to coming to see us. Part of it was to help pay for her care, she had been paying her son to help care for her. But the way that she was paying him is actually not really allowed under the law and so if they wouldn't have come to see us Jane would have been faced with what's called a penalty. This would have been a real problem for her, because it would have subjected her to potential eviction from the facility that she was in if they hadn't legally straightened it out with our office. And so, by employing this legal strategy, by putting this thing in place to save the money, and by doing all the things right from beginning to end, we were able to help Jane avoid the penalty, avoid the eviction from the facility of the family's choice, and we were also able to save a significant amount of money.

It Isn't All About The Money...These Situations Are Stressful.  We Can Reduce The Stress.

Of the $177,581.15, part of that was an additional home that she had that was out of state. That would have been a real big hassle for the family, to have to quickly sell - in fact, they would have been only able to sell it at a big time loss. So, this made it able to not only save the money, but also to save the hassle of the situation, which it was - a major hassle for everybody...just like all these are, because nobody wants this for their loved one, and yet these are the things that we sometimes are forced to face.

You Won't Know How We Can Help If You Don't Call.  (We Don't Bite, I Promise!)

So, what we did for Jane, we can do for you as well, but you've gotta come and talk to us, ok? That's the big key. There's no harm in talking to somebody that is really ready, willing, and able to help you - and oh, by the way, can save you a lot of money in the process! So please, if your family is facing this situation, don't sit there and try to figure it out by yourself. And don't listen to all this crazy stuff that everybody's telling you! Come to a qualified elder law attorney, sit down, have a conversation, and learn your options. It's really the best thing for everybody involved.

Call us at (248) 278-1511


Marital Status:  Single – Half Loaf

Financial Status:  $300,000.00 plus house

Gross Income:  $2,132.13

Planning Tools:  Spend down on household items and improvements, attorney fees and funeral agreement.  Half a loaf planning with Medicaid qualified annuity and irrevocable trust.

Issues:  Out of state home with a value of $110,100.00 that the family wanted to keep, high number of assets requiring planning to obtain eligibility, previous gifts, specialized care.

Final Outcome:  Full Approval with expected penalty period (penalty was cured by planning).  Previous gifts to family of $25,000.00, preservation of out-of-state home plus cash resulting in additional $125,968.00 put into irrevocable trust and saved.  Medicaid qualified annuity of approximately $148,000.00 to pay through the penalty period.  Resulting penalty and annuity payments was 19 months.  Patient has outlived her penalty period.  Patient pay amount (calculated based on gross income and deductions for health insurance premiums and personal needs allowance) of $1,985.00 per month patient responsibility remaining covered by Medicaid.

Savings:  Primary residence, out of state home, and cash in Trust $125,968.00. Cured a potential penalty that would have resulted in a loss of benefits. Spending of amounts to benefit client and family related to home improvements, funeral expenses and attorney fees. Due to her health issues, her private pay rate was approximately $14,000.00 per month prior to Medicaid. Therefore, after end of penalty period, additional savings of $12,015.00 per month/$144,180.00 per year.  As of this summary she has outlived her penalty by 9 months and is still alive.

Benefit to Facility:  Private pay client for a full year, no loss of benefits due to penalty issues and smooth transition from private pay to Medicaid.