After our Dad sold his home, he moved in with my Sister and her Family. Since we are POAs, we took the proceeds of the sale of his home and opened up investment accounts for him. The rest of the money sat in a checking account at a local bank. So far so good, right?
Over time Dad continued to receive his pension. Just like any other grand-parent, he was very was generous with his gifts on birthdays and at holiday-time. Most recently, when my 16 year old niece started driving, he wanted to buy a car for her. What a wonderful gesture, right? WRONG!
My sister and I thought we had dad's financial matters all covered. We had the POAs, we were listed on his bank accounts, and he had a will. During my research for this website, I attended an Eldercare Seminar where Mr. Peter Gilbert from High Point Law office was one of the presenters. What a huge eye opener this was. We were WRONG again in our thinking. We never thought that someone like my Dad was in a position to need the services of an Estate Planner.
My sister and I decided to meet with the Estate Planning Attorney. He confirmed that we had done a fair job but there was more preparation Dad needed to do for his future care needs; especially if he would ever need skilled nursing care.
We learned so much from the attorney. He informed us that when the time comes for Dad to be accepted into a nursing home and to receive Medicaid, they will do a five year look back into Dad's finances. Medicaid is what kicks in when people go into a nursing home. What does all of this mean? It means that Medicaid will pay for the nursing care when there is no more money to pay for it. The expectation is that your (Dad/Mom) use that money first to pay for the nursing home stay, then when that is all gone Medicaid kicks in. Sounds good so far?
Here is where things get complicated. Remember that car that Dad offered to buy my niece and all of those generous monetary gifts? If within five years before entering a nursing home he makes those gifts, all of them will have to be paid back by the recipient or be subject to penalties by the State. All of this is quite a rude awakening for your elderly parents to learn that they CANNOT do whatever they want with their money; while they are still living.
Planning for Elderhood is complicated. There is so much involved. This is why an Estate Planning Eldercare Attorney is so valuable. They help in so many ways. They navigate through Veteran benefits . They will inform your parents of all of the appropriate steps to help best establish a plan for their future care. Visit with an Estate Planning Attorney early in this journey with them. Many offer FREE consultations.