WHEN IT COMES TO TAKING CARE OF AGING PARENTS, IT CAN BE AN
EMOTIONAL ROLLER COASTER.
BUT THE FINANCES INVOLVED CAN BE DRAINING FOR FAMILIES.
CAROLEE MCGRATH SAT DOWN WITH THE CHAIR OF ESTATE PLANNING AND
THE ELDER LAW DEPARTMENT AT BACON WILSON LAW FIRM IN
SPRINGFIELD TO LEARN MORE ON HOW TO PLAN FOR THE LONG-TERM CARE
OF A LOVED ONE.
>> IN MASSACHUSETTS, THE AVERAGE IS AROUND CURRENTLY AROUND
$11,000 A MONTH.
>> IN A NURSING HOME?
>> IN A NURSING HOME.
>> SO THAT'S AN OVERWHELMING NUMBER IF YOU HAVE PARENTS WHO
ARE AGING, WHO ARE WILL, YOU KNOW, FOR PEOPLE WHO ARE STILL
RAISING THEIR CHILDREN AND ALSO CARING FOR THEIR PARENTS AS
WELL.
WHERE DO YOU EVEN BEGIN TO TRY TO ASSIST YOUR PARENTS?
>> THE FIRST PART IS TO GET THEM TO START UNDERSTANDING THAT
THERE ARE THINGS THAT THEY CAN DO.
THERE'S NOT A LOT OF OPTIONS, BUT SOME OF THE THEM ARE VERY
AGGRESSIVE, AND PEOPLE HAVE TO BE WILLING TO PART WITH ASSETS
AND GIVE UP CONTROL OF ASSETS IN ORDER TO PROTECT THEMSELVES
BECAUSE IF NOT THEY HAVE TO BE SOMEWHAT IMPOVERISHED BEFORE
MEDICAID WILL COVER THEIR COSTS OF CARE.
>> TALK A LITTLE BIT ABOUT THAT.
WHAT IS THE INCOME LEVEL OR WHAT ARE YOUR ASSETS, THE MAXIMUM
AMOUNT OF MONEY YOU CAN HAVE BEFORE MEDICAID KICKS IN?
>> KNOWING THERE ARE EXCEPTIONS IN THE RULES THE BASIC RULES ARE
IF YOU'RE SINGLE, YOU CAN HAVE $2,000 AND THAT'S IT.
YOU HAVE TO SPEND DOWN TO $2,000 BEFORE THE STATE AND GOVERNMENT
WILL PAY FOR YOUR CARE.
SO YOU HAVE TO LIQUIDATE YOUR I.R.A., CASH VALUE OF YOUR LIFE
INSURANCE, YOUR HOUSE.
YOU HAVE TO BASICALLY DIVEST ALL OF YOUR ASSETS AND SPEND THEM
DOWN BEFORE YOU CAN QUALIFY, UNLESS YOU'VE DONE PLANNING
AHEAD OF TIME.
IF YOU'RE MARRIED, THE SPOUSE AT HOME IS ALLOWED TO HAVE
$123,600, WHICH RANGES EVERY YEAR, AND THEN THE SPOUSE IN THE
NURSING HOME CAN HAVE $2,000.
BUT THEY CAN ALSO HAVE ONE PRINCIPAL RESIDENCE.
IT HAS TO BE WORTH SOMEWHAT LESS THAN $800,000.
>> SO WHAT DO YOU RECOMMEND FOR PEOPLE AS THEY START LOOKING AT
THIS?
OBVIOUSLY YOU WANT TO START PLANNING BEFORE YOU GET TO THAT
CRISIS POINT, CORRECT?
>> CORRECT.
EVEN IF YOU'RE MARRIED AND CAN YOU HAVE MORE ASSETS, THE INCOME
IS TREATED DIFFERENTLY THAN THE ASSETS.
SO IF YOU'RE MARRIED AND YOU'RE IN THE HOME, WHICH WE CALL THE
COMMUNITY SPOUSE, HE OR SHE IS ALLOWED TO HAVE UNLIMITED
AMOUNTS OF INCOME.
WHERE AS THE SPOUSE IN THE NURSING HOME, ALL OF THEIR
INCOME HAS TO BE SPENT ON THEIR CARE.
SO THERE'S AN ASSET TEST AND THERE'S AN INCOME, AND THEY'RE
DIFFERENT.
THE TRICK IS TO GIVE AWAY ASSETS OR DO SOME PROTECTION OF ASSETS
FIVE YEARS AND ONE DAY BEFORE SOMEBODY BECOMES ILL.
>> RIGHT.
HOW DO YOU KNOW THAT?
SO IF YOU'RE -- >> I FORGOT THE CRYSTAL BALL
TODAY.
>> SO IF YOU WERE TO CONSTRUCT SOMEBODY MY AGE, RIGHT, HOW TO
HELP YOUR PARENTS OR HOW TO START PLANNING, FIRST OF ALL,
IT'S A TERRIBLY UNCOMFORTABLE CONVERSATION TO HAVE.
BUT SECOND, LIKE WHERE DO YOU EVEN START WITH THAT?
>> THE FIRST STEP REALLY IS TO GET YOUR PARENTS TO UNDERSTAND
THAT THEY'VE WORKED REALLY HARD, AND WE ASK OUR CLIENTS, IF THEY
COME TO US, WHO WOULD YOU RATHER GIVE YOUR MONEY TO, UNCLE SAM,
THE NURSING HOME, OR YOUR FAMILY?
AND IF THEY HAVE THE RIGHT ANSWER AND SAY THEIR FAMILY, WE
SAY OK, HERE ARE THE CHOICES OF WHAT YOU CAN DO.
WE GIVE THEM THE LAUNDRY LIST.
AND THEN WE CHECK OFF THE THINGS THAT THEY DON'T LIKE THE MOST.
AND THEN YOU'RE LEFT WITH WHAT'S AVAILABLE FOR THEM.
AND THEN YOU HAVE TO MAKE THE TOUGH DECISION BECAUSE ONE
DECISION IS DO NOTHING AND TAKE THEIR CHANCES, WHICH ISN'T
USUALLY A GOOD DECISION, BUT IT'S A DECISION THAT SOME PEOPLE
TAKE.
>> SO IF YOU TRANSFER OR GIFT A HOUSE INTO YOUR KID'S NAME,
RIGHT, THAT ALSO CAN OPEN UP A WHOLE CAN OF WORMS IF THERE'S
FIGHTING WITHIN THE FAMILY, CORRECT?
>> RIGHT.
I'M A BIG FAN OF THE DEEP OF THE LIFE ESTATE, WHERE THE CHILDREN
OWN THE REMAINING INTEREST OF THE HOUSE AND PARENTS OWN THE
LIFE ESTATE, WHICH MEANS THE PARENTS CAN'T BE THROWN OUT AND
THEY CAN USE, OCCUPY, LIVE IN THE PROPERTY AND THEY PAY ALL OF
THE EXPENSES BUT WHEN THEY PASS AWAY, THE KIDS GET IT WITHOUT
ANY TAX IN MOST CASES.
THERE'S NO PROBATE.
AND IF THEY STAY HEALTHY FOR FIVE YEARS, THEN THEY CAN HAVE A
BIG CELEBRATION TO SAY, WELL, THEY BEAT THE SYSTEM BECAUSE
THEY MADE THE FIVE YEAR LOOKBACK.
BUT IF THE CHILDREN SHOULD PASS AWAY, GET DIVORCED, GET SUED OR
FILE BANKRUPTCY, THAT'S AN ASSET THAT'S REALLY THE CHILD'S.
AND IT COULD BE ATTACHED BY THEIR CREDITOR, AND THAT COULD
CAUSE A PROBLEM FOR THE PARENTS.
>> WHAT ABOUT LONG-TERM CARE INSURANCE, WHO WOULD BE BEST
SUITED TO LOOK INTO THAT?
>> EVERYBODY SHOULD LOOK AT IT.
SOME PEOPLE CAN'T AFFORD IT.
AND SOME PEOPLE WON'T BE ABLE TO GET IT BECAUSE THEY'RE NOT
HEALTHY ENOUGH.
SO IN YOUR CASE, YOUR PARENTS MIGHT BE TOO OLD TO GET
LONG-TERM CARE INSURANCE BECAUSE IT'S GOING TO BE SO EXPENSIVE OR
MAYBE THEY DON'T HAVE THE HEALTH QUALIFICATIONS TO GET IT.
YOU BEING YOUNGER CAN AFFORD LONG-TERM CARE INSURANCE, BUT IF
I HAD MY SAY FOR YOU, I WOULD HAVE YOU LOOK AT A NEW POLICY
CALLED A HYBRID POLICY.
IT'S A COMBINATION LIFE INSURANCE, LONG-TERM CARE
POLICY.
SO IF YOU BUY THIS POLICY AND YOU NEVER GO TO A NURSING HOME,
THERE'S A GUARANTEED DEATH BENEFIT FOR THE KIDS.
BUT IF YOU GET SICK AND NEED HOME CARE OR LONG-TERM CARE, YOU
CAN ACCESS SOME OF THE DEATH BENEFIT WHILE YOU'RE ALIVE AND
USE THAT MONEY TO PAY FOR YOUR CARE.
IF YOU'RE NOT WILLING TO GIVE AWAY ASSETS.
SO IT'S A GREAT PRODUCT AND IT'S RELATIVELY INEXPENSIVE AS YOU'RE
YOUNGER.
>> WHAT ABOUT FOR FAMILIES WHOSE PARENTS WERE IN THE MILITARY,
THERE ARE ALSO OTHER AVENUES TO LOOK AT AS WELL, CORRECT?
>> CORRECT.
IF YOU'RE A VETERAN WHO'S OTHERWISE DISHONORABLY
DISCHARGED, THEN YOU HAVE THE BENEFITS OF SOMETHING CALLED AID
AND ATTENDANCE, WHICH CAN GIVE YOU MONEY IF YOU NEED MONEY TO
STAY AT HOME OR BE IN A FACILITY SUCH AS AN ASSISTED LIVING
FACILITY.
IF YOU'RE SO ILL THAT YOU NEED LONG-TERM CARE WE'RE VERY LUCKY
IN WESTERN MASS TO HAVE THE HOLYOKE SOLDIERS HOME AVAILABLE
FOR ANYBODY WHO'S A VETERAN.
THE SPOUSES CANNOT GO THERE UNLESS THEY'RE VETERANS BUT ANY
VETERAN CAN GO THERE AND THAT'S A GREAT OPPORTUNITY.
BUT THERE'S A LIMITED NUMBER OF SPOTS AVAILABLE THERE.
>> TALK TO ME A LITTLE BIT ABOUT THE CONVERSATIONS YOU MUST HAVE
WITH CLIENTS ABOUT EVEN HAVING THIS CONVERSATION AND TRYING --
I KNOW YOU ALSO TEACH A COURSE ON THIS.
SO WE CAN GO SEVEN HOURS ON THIS SEGMENT, BUT THIS IS A DIFFICULT
ISSUE TO FACE, YOU KNOW, IN FAMILIES.
>> USUALLY IT'S CHILDREN WHO CONTACT ME VERY OFTEN AND SAY
WHAT CAN WE DO FOR OUR PARENTS?
UNFORTUNATELY, I VIEW THAT SITUATION AS THE PARENTS AS MY
CLIENTS SO I NEED TO TALK TO THEM AND TELL THEM WHAT THE
OPTIONS ARE.
ONE OF MY FAVORITE STORIES IS I WAS INTERVIEWED BY "THE NEW YORK
TIMES" BY A WRITER AND HE COULDN'T TALK TO HIS PARENTS.
SO AT THE END OF THE ARTICLE HE WROTE AND SAID, WELL, WE HOPE
MOM AND DAD ARE READING THIS ARTICLE AND THEN HE SENT THE
ARTICLE TO THEM.
SOMETIMES YOU JUST DO THAT.
I HAVE THIRN WHO BOUGHT THEIR PARENTS A GIFT CERTIFICATE FOR
LEGAL SERVICES FOR CHRISTMAS TO GET THEM TO GET STARTED ON THE
PLAN.
IF THAT WORKS, WHATEVER IT TAKES SOMETIMES TO GET THEM GOING.
THE PROBLEM IS IF THEY NEVER DO ANYTHING, THEN THEIR ASSETS ARE
AT RISK AND FIVE-YEAR CLOCK DOESN'T START TICKING.
WHEN I FIRST STARTED PRACTICING, IT WAS A TWO-YEAR LOOKBACK
PERIOD AND THEN 2 1/2 YEARS AND THEN THREE.
NOW IT'S FIVE.
AND IT'S NOT GOING TO GET ANY SHORTER.
>> SO YOU JUST HAVE TO BE PREPARED AND YOU REALLY HAVE TO
START PLANNING LONG BEFORE YOU REALLY THINK YOU NEED TO.
>> RIGHT.
AS I TELL MY CLIENTS, THEY ALL TELL ME TIME GOES FASTER AS THEY
GET OLDER.
>> SURE DOES.
>> THE NEXT FIVE YEARS WILL GO FASTER.
THEY SHOULD START DOING IT NOW BECAUSE IT WILL TAKE LESS TIME.
>>