Navigating through the long term care system usually requires a team of advisors. Although the attorney is, no doubt, a pivotal person, the accountant, financial advisor, and insurance specialist are equally important. And when one piece isn’t properly in place, it can be catastrophic.
Mrs. Jones' story is illustrative. Mr. & Mrs. Jones decided to sell the home in which they raised their four children. They invested the money in annuities and decided to rent and live on the income from their investments and Social Security. Mr. Jones, however, had already exhibited some signs of Alzheimer's.
After the sale of their home, Mr. Jones' condition deteriorated rapidly. He became restless and at times physical with Mrs. Jones. She could no longer keep her husband at home. Mrs. Jones came to us for help, thinking she could get her husband on Medicaid (MassHealth) in a nursing home. She didn’t realize that their assets would have to be spent down to $109,560 before Mr. Jones could qualify for Medicaid.
Mrs. Jones was distraught, "How can I live on $100,000? I'm only 65." As part of our planning we told Mrs. Jones to cash in the annuities and buy a new home with the money, because the home would not be a countable asset for Medicaid purposes. There was however an issue with cashing in the annuities because the Jones would have to pay a 7% penalty for cashing in the annuities. However, they decided it was more important to protect what they could for the rest of Mrs. Jones' lifetime.
We were able to help Mrs. Jones get her husband into a quality nursing home. She privately paid for a few months, cashed in the annuities, paid the surrender fees, and bought a home. Through this and other planning we were able to help Mrs. Jones preserve the majority of her savings - money she will need to provide for her own care down the road.
The lesson to be learned here is that the Jones could have achieved much better results if they had simply come to us before they sold their home and bought annuities. No one thought to ask what would happen if Mr. or Mrs. Jones needed care sooner than later.
As you can see having a team of advisors work together is important. As we progress on the Elder Care Journey, our needs change and evolve. That is why the team of elder law professionals at Dennis Sullivan & Associates offers clients a unique, total care plan called the Life Care Plan.
We also host a free educational Trust, Estate, and Asset Protection Workshop twice a month in Wellesley, Massachusetts where experienced elder law lawyer and estate planning attorney Dennis B. Sullivan will reveal how you can protect your home, spouse and life savings from the rising cost of nursing home care. To learn how to avoid nursing home poverty, call 800-964-4295 (24/7) and reserve your seat today or register online.