long term care and Medicare

"Gil Faver"

"Gil Faver"

"Dave Dodson" wrote

He asked about long term care. See the subject line.

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In article , "Gil Faver" wrote

Medicaid covers poor folks period. In California poor means

"Avrum Lapin" wrote

On Sep 19, 2:14 pm, "Gil Faver"

I have mixed feelings about this. To your quote above, these attorneys are making use of the tax code as it's written. Google [medicaid look back rules] and you'll see that the tax laws encourage this.

Years ago, I asked a question about this issue on MTM (misc taxes moderated) and got some sarcastic responses about how greedy children were trying to game the system to gain an inheritance. Others chimed in that the discussion and question were legitimate.

For my own circumstance, I directed my mother to leave it all to my sister, and I put the chance that she shows up at my door to claim the guest room at 50/50 20 years hence. No hiding assets.

There's a similar situation on my wife's side, with her sister not planning at all for the future. I don't have my hand out for a dime, I just don't want to have to plan to support an extended family who made no plans of their own. I counseled my mother-in-law to set up proper trusts to avoid probate and to dole out the remains so the spendthrift daughter can't burn through the funds, but the trusts are pass through and do not hide the assets for medicaid purposes.

So I agree with your intent, but not your conclusion. i.e. we need to work to change the laws that permit any hiding or transfer of funds to avoid paying for one's own care, but I know you were being dramatic suggesting we jail lawyers who are simply using the current tax code to their clients advantage. When I am asked by others, it's my job to tell them what the laws are, even though I find it as distasteful as you.

Joe

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Joe, I was responding to the word "hiding". I have no problem with people accessing needed services available to them, nor for people legitimately using the tax law to their own advantage. But "hiding" smacks of illegalities. This cannot be tolerated by any of us.

Elizabeth Richardson

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I can chime in my two cents. Let's see, a family works hard at the family business for decades, and then it is all to be spent taking care of the parents. The kids worked for nothing and for cheap, because they were to inherit the family business, and the family was close knit. Now, they stand to get nothing, and those folks who did not work hard and put money away are able to get extra benefits from the government, which this hard working family ahs also been paying for with confiscatory tax rates due to their success and hard work.

Hard for me to find fault with making use of the tax code as written in this instance.

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The 'hiding' that prompted your note was rick++'s reference to the lookback rules (he thought 3 years, but it's now 5). In my case, I could have counseled my mother-in-law to put her assets in an irrevocable trust, and if she makes it past five years, she'd be eligible for medicaid, as she'd have 'no' assets.

To answer Gil - As I stated, I am on the fence as to when such maneuvering is appropriate. Why should you (or any taxpayer) have to pay the bill for my mother-in-law when she had assets that she could use for her own care? If she were truly out of money, I understand, but I think I side with Elizabeth that hiding (even within the law) funds takes one's care and foists it upon all taxpayers.

Joe

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"Gil Faver" hard at the family business for decades, and then it is

If the parents wanted their children to have the family business, wouldn't they have made arrangements to gradually turn it over, so it could not be counted among the parents' assets?

I do think you raise a tough issue that arises between some parents and children, though. For the wealthy, paying for in-home care (nurses and such) is expensive. It is cheaper to go to a non-Medicaid nursing home and pay out-of-pocket. Greedy children who do not know how to make their own livings will be inclined to push their parents into an old folks' home so their inheritance (if their parents left their estate to them) is not decimated. Yet come on, the parents worked hard too. Are they not entitled to pay the high cost of home health care as long as possible, living in the way they chose and earned, rather than be stuck in an old folks home?

Two weeks ago I had the sad responsibility of helping a relative get admitted to a nice, Medicaid qualified nursing home. The relative had squandered a very reasonable, large divorce settlement received some 20 years ago. She has no assets; only her meager, monthly Social Security income.

Why did she squander it? Because she did not have enough education to fend off shark-like financial planners who did not know what they were doing. She bought into junk bonds, promised a nice return, for example.

In spite of their foolishness, I have a hard time tossing elderly people like this (in this instance, with Alzheimer's) onto the streets. I am not sure whether you are attacking nursing home Medicaid or not, but I think it is a good thing that enables young people to keep working while their parents or relatives are decently cared for.

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"joetaxpayer" wrote

I think the conflict is between (1) telling older (generally) people they cannot transfer their assets; and (2) telling younger (generally) people they must pay, through taxes, for old folks' care. Which is more loathsome?

This sort of conflict is routine and invites a slippery slope. Shall we next declare couples who refuse to marry because of a diminishment in Social Security benefits that they are, for all intents and purposes, married after X years and so must give up some of their Social Security? Are these folks taking advantage of taxpayers too? One can say yes they are, but then one had better note that the line has to be drawn somewhere, re married and unmarried couples and SS benefits. Wherever the line is drawn, someone is going to feel shortchanged.

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"Gil Faver" business for decades, and then it is all to be spent taking care of the

So you're in favor of cradle-to-grave health care? I, for one, am not and I think most Americans are not either. I don't give a whit whether someone inherits or not. Inheritances are not "rights" but privileges. I am not in a position to guarantee someone else's privileges by paying for something they can easily afford themselves. An inheritance isn't due until someone dies. Are the parents dead before they hit the assisted living center? And, let's face it, most of these older people will not be in nursing homes but, rather, assisted living centers. There is a world of difference.

Elizabeth Richardson

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In my example, the kids earned their inheritance. And, I look at bequests as a right for someone to do with their money what they wish (and if they want to stiff their kids who did not work in a family business, that's ok by me).

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"Gil Faver" by me).

No inheritance is earned. The kids chose to work for less than they were worth. Yes, people have a right to do with their money as they wish. I wish not to use my money to pay for someone's nursing home care that they can well afford to pay for themselves. Those same people could be cared for at home by those same children who expect to inherit, by the way, and thus save all that nursing home cost.

Elizabeth Richardson

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well, I bet those folks who are paying tons of income taxes would rather others chip in even more than those others currently do. They wish to help those in need, but wish for others to pay for their wishes.

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