I met with Gina and Rob and their mother recently who are all concerned about a recent Alzheimer’s diagnosis for 96-year old mom. Although mom is living independently and is generally alert and oriented, there are times when she lapses and has little or no recollection of her whereabouts or the task she was working on. Everyone is concerned, including Mom, and just to be on the safe side, Mom is going to move in with Gina. Mom has a power of attorney and a health care proxy but has not made any arrangements to protect her considerable assets that could be vulnerable when she needs nursing home care.

The doctors have determined that Mom cannot live alone anymore and she will move in with her daughter, but they aren’t sure how long that will last based on mom’s health. The family, which includes four children, is concerned about what would happen with all of mom’s assets if she has to go into a nursing home. This is what Mom owns:

House – mom is sole owner

$125,000

Checking Account – Joint with Gina

$   15,000

Savings Account – Joint with Gina

$ 45,000

Savings Bonds – Mom & Each Child

$107,500

Annuity – All 4 children beneficiaries

$165,000

Retirement account – IRA – children beneficiaries  

$ 75,000

Total

$532,500

I gave it some thought and this is what I suggested:

Since Mom is moving in with Gina, she can purchase a one half interest in Gina’s home as Joint tenant with right of survivorship, which is worth $425,000. That will use $212,500 in resources. If Gina refuses to sell her home, the asset becomes unavailable for purposes of Medicaid eligibility.

She can keep $14,850 for herself as a resource allowance.

The savings bonds worth $107,500 are unavailable so long as the co-owner has possession of the bonds and refuses to sell them.

The retirement account valued at $75,000 is exempt because it is in payout status.

Mom can prepay for her funeral and the funerals of her 4 children and their spouses. At $10,000 each, she can spend down a total of $90,000.

If Mom takes these steps she will have $32,650 in excess resources, which she can use to secure a room in a Skilled Nursing facility that the family selects.

All of the rest of her assets will be protected – a savings of $499,850.00. The family came in turmoil and left with peace of mind. It doesn’t get better than that.