I met with Henry and his children recently to discuss Henry’s wife, Rita who had been diagnosed with Alzheimer’s disease in 2016.  While Henry had been able to care for his wife and handle the household chores, things changed suddenly after Rita had taken a fall after wandering outside unaccompanied.  While she didn’t break any bones, she suffered a concussion and was hospitalized.

After she returned home, things took a turn for the worse as Rita became increasingly confused and disoriented and her disposition changed significantly. She has temper tantrums, is frequently verbally abusive and has refused help for her basic needs such as dressing. Their home has become chaotic and Henry and the family are distraught. A Geriatric Care Manager was called in and Rita was assessed.  Based on the care manager’s evaluation, Rita requires skilled nursing care and should be placed in a safe environment as soon as possible.

Neither Henry nor the children want to see Rita placed in a skilled nursing facility, but the three children live out of town and Henry is exasperated and exhausted. Henry and Rita worked hard for their retirement and now have $1,014,500 in assets. Henry has looked into nursing homes and learned that the cost of a facility in which he would like to have Rita placed is $13,000 a month.

Rita is only 68 years old and other than Alzheimer’s, she is in excellent health. Henry realizes that Rita may live 15 years or more in a nursing home. He did the math and realized that nearly all of their assets would be depleted in six years. Henry, 70 years old, is concerned that all of their life savings will be exhausted and there will be nothing left for him to live on. His only consolation is that Rita will be cared for because Medicaid will pay for her care once everything is gone.

It does sound very bleak.  I reviewed all of their assets and this is what I found:

Exempt or unavailable Assets:

House Joint with Rita

$ 175,000
Well spouse can own a home

Car – 2010 Ford SUV

$     6,000
Well spouse can own a car

Rita Resource Allowance

$  15,150
Applicant is allowed this amount

Henry Resource Allowance

$123,600
Well spouse allowance for this case

Henry – IRA

$  375,000
IRA in payout is exempt

Rita – IRA

$ 145,000
IRA in payout is exempt

Savings Bonds – Henry or Children

$  75,000
Legal impediment, kids has bonds

Total exempt or unavailable assets

$914,750

After deducting the exempt or unavailable resources, there is $99,750 in resources to pay for care. I advised Henry that he could also prepay burials for himself, for Rita and for the kids and their spouses that would further reduce the available funds. For example if he prepaid for 8 burials @ $7,500 @, the assets available to pay for Rita’s care would be reduced by $60,000 to $39,750 before Medicaid would kick in. By examining his situation closely and developing a plan, Henry will still have resources for himself, while ensuring that his wife receives the care she needs.

Alzheimer’s Disease, Medicaid, Nursing Home, Skilled Nursing Care