CONSTRUCTING A PLAN

Our last installment ended with our intrepid caregiver, Elizabeth, lamenting, “That’s what scares me.  Who can help me put together a plan?”

Her attorney nodded.  “It is a scary situation.  The thought of your mother coming home from rehab to an apartment that she can’t access, living alone there with your father who has become unable to handle life’s realities, is frightening.”

Elizabeth nodded.  “There’s no money to have them both go someplace where they’ll get care.  It seems like it’s all up to me.”

The attorney empathized.  “That’s going to be more and more often the case, I’m afraid, as folks realize their retirement savings just aren’t adequate to see them through the end of life.  Medicaid isn’t set up for this kind of thing – it only pays for nursing home costs if someone needs continuous skilled nursing care, so even if your parents had no assets, they would only qualify for community medical assistance.  That would help with medical costs, but not housing.

“Some counties have a low-income subsidy, but that’s mostly for nursing home care.  Section 8 housing might help with the rent, but wouldn’t pay to have someone come to the home to care for your parents.

“But if your Mom had to remain in the nursing home and your grandson could stay with your Dad, they might qualify for Medicaid for your Mom and your Dad could keep most of his assets.”

Elizabeth paused to digest all this.  “I guess we need to plan to have at least Dad move in with us eventually, even though he won’t like it.”

“Maybe,” the attorney mulls, “but maybe he’d like the change after he gets used to it.  Maybe it’s an opportunity for both of them, while we wait for your mother’s situation to settle down.

“Do your parents have up-to-date powers of attorney and medical directives?”

Elizabeth sighed.  “The will is pretty straightforward.  I’m an only child, so after my folks are both dead it leaves everything to me.  But my father would never sign a power of attorney, and my mother always followed his lead in that kind of thing.  They’ve always been independent, and I think a power of attorney scared my dad.”

The attorney nodded.  “Not the usual situation, but not unheard of, either.  I’ve had clients with the same concern. Are you on the bank accounts?”

“Yes, my mother managed to convince my father to put me on the accounts a couple of years ago.”

“That can be a workable situation.  Be careful, though. If you’re a joint owner on the account, your creditors can get into your parents’ bank accounts.”

“That won’t happen,” she countered.  “Our financial situation is under control.”

“I hope not,” the attorney assured, “but I needed to be sure you understood the risk.

“Do your parents have any other assets?”

“Yes,” Elizabeth replied, “my father has what’s left of his 401(k) where he used to work, and they have small Roth IRAs.”

“Do the benefits people at your father’s work have you listed on the account so you can authorize distributions?”

“I don’t think so,” she answered.

“Then if they need more money than the minimum annual distribution, your father will have to sign for it.”

“He can still sign his name,” observed Elizabeth.

“That’s good, but if he doesn’t know what he’s doing, or if he gets to that point, you’re on shaky legal ground.

“Unfortunately, if your parents are unable to take care of their own needs, you’ll have to file for guardianship.  That’s expensive and time-consuming. If your mother regains her capacity, or if your father gets over his current issues, we can get them to sign powers of attorney.  That would take care of a lot of potential problems.

“Do your folks have living wills?”

Elizabeth nodded.  “They signed whatever the hospital gave them the last time they went in.”

“That’s better than nothing,” the attorney assured her, “but the usual hospital document is sorely lacking in several respects.  If they are able to sign documents, I’d like them to sign an updated medical directive as well.”

“That’s a lot to think over,” Elizabeth rose to conclude the interview.  “Let me think things over, see how things develop, and get back to you.”