Inheritance/retirement question

[tooge]

Ok, here's the scenario. My Mother in Law is 83 years old. She is currently living in an assisted living facility. My wife does the bulk of the work in taking care of her outside of the facility, driving to Dr visits, taking her out to lunch, any other appointments, etc.

My father in law passed away two years ago this feb. He was a WWII vet, having served in Okinawa in the Marines. After serving in the Marine Corps, he went to work for the USPS, where he retired after 35 years. He has a pension, that my MIL gets from the USPS to the tune of $1700 per month.

My MIL worked for the school system as a lunch lady for over 30 years. She has a pension through a non teachers pension program to the tune of $1600 per month.

My BIL wants to pay $2200 to have some company called American Veterans Aid to do all the paperwork to try to get her the VA Long Term Care Benefit since pops was a war vet. It's the Aid and Attendance program. From the research I can find, she doesn't qualify because she makes too much ($3300 per month) with her two pensions. He says that if she doesn't qualify, then we need to "hide" her money by giving it to both he and us. I'm calling BS.

My MIL has a sizable sum of money in money markets/ CD's, and old war bonds. My BIL is trying to get her to gift as much of that to us, our kids, him, his kids, etc. I think his ass is just greedy because his wife likes to shop and bankrupted them several years ago, but thats another story.

Any of you financial planner types out there know what is the best way to handle her large sum of money, her monthly pension, the VA program, and if it's viable? Any help would be great. Thanks

[vailpass]

Don't be a 14 year old kid that takes your aunt's '77 Lincoln convertible that how the hell were you supposed to know she loved more than life itself apparently for a drive without permission and put it in a ditch trying to make a corner too fast because you had no idea how hard that ****ing boat was to turn. That way you won't have to hear about how you are being cut out of her will for the next god damn week.
There's some inheritance advice for you.

[Amnorix]

Originally Posted by alnorth

I guess if her two pensions have a cashout option, then she can take whatever the present value of her pension is as a lump sum payment (which eliminates her future income), then give away all that money plus whatever else she has, wait a few years for the clawback period, and THEN she might qualify for assistance...

... but if you do that then you are (legally) ripping off the taxpayers, and I feel dirty just for bringing it up. Hopefully her pensions do not allow her to cash out so that this is not even an option.

Generally this isn't the case with government pensions, which these are. What you're talking about sounds alot more like annuities.

What would happen in two situations, assuming you can't do what you're suggesting (which I'm pretty positive is the case).

Assumptions: $250K in assets and $3,300/month in pension/SS, etc. income.

1. she goes into a nursing home with no planning. Assume $10K/month. She is responsible for the entire $10K per month and will get no medicare/medicaid/state help until she spends all her assets down to near zero (in Mass. the amount is $2,000 or less), then Medicaid kicks in. So every month you would pay $3,300 of her income, plus almost $7K of her assets, meaning the entire $250K is spent down in 36 months. After that, the government pays for the nursing home, and takes the entire $3,300/month to offset that.

If she owns a home, the government would likely put a lien on it as well. They don't usually force a sale, but they will have a lien based on the amount they pay.


2. Proper estate planning would probably involve re-titling the house (if any) to a trust and/or the kids, and moving the liquid assets into a trust as well. She is the beneficiary of the trust, but it specifies that the principal (the res) cannot be touched. After she dies, the beneficiaries are the heirs. There is a look-back period of some time (several years at least). Once the look-back period is exhausted, then the transfer of assets to the kids/trust cannot be touched by the government. Congrats, you have made her legally poor enough for the government to pay the entire amount of the nursing home.


NOTE: LEGAL ADVICE ON CHIEFSPLANET IS FREE FOR A REASON, AND WORTH WHAT YOU PAID FOR IT.

[OmahaChief]

Originally Posted by Amnorix

This guy knows what he's talking about.

I agree with this guy that said that guy knows what he is talking about. We missed the boat on this with my Grandma in South Dakota a couple years back. She had given us all a little bit of money and they came after it. I had saved it so it was not a bid deal to me. To some of the poors in the family they had issues. I think one even did a payday loan to pay back.

[tooge]

Good stuff guys. Thank you. Getting an attorney.

[Amnorix]

Originally Posted by tooge

Good stuff guys. Thank you. Getting an attorney.

Big key here -- not all attorneys are made equal. Make sure you get one that has experience with estate planning / elder law.

Some guy that does slip and falls, that lady that helped your buddy out with his divorce, or that other guy that does real estate closings, ain't going to be able to help you.

Here, two minutes on Google, based on your location:

http://www.northlandelderlaw.com/

http://www.fulkersonelderlaw.com/

http://smithelderbusinesslaw.com/about-us/


Now is also the time to find out if she has a will, etc. If she does, how old is it? It might need to be redone depending on whether there have been changes in circumstances.

Word for the wise: with this shit it's pay now or pay later, but if you **** it up, you will most assuredly pay ALOT MORE later...

[ClevelandBronco]

Originally Posted by tooge

Good stuff guys. Thank you. Getting an attorney.

Good. You're going to need one when you spend it all on hookers and blow.

[Buehler445]

Originally Posted by tooge

Good stuff guys. Thank you. Getting an attorney.

Like others have said, pretty much the only reason to gift money from an estate is to get below the $5M exemption so you don't have to pay estate tax OR to eliminate any assets to get Medicaid to cover rest home.