I recently met with a client who related a story to me about a family friend who just finished spending $1,000,000 on her nursing home care. Luckily the client gave me permission to share that story in general terms so that others might learn that these economic disasters are real. This story will hopefully alert others to the perils of waiting too long to enter into Medicaid and Nursing Home Planning in Pennsylvania (PA).
The woman referenced was, but no longer is, the prototypical millionaire next door, living modestly, not spending and therefore accumulating a nice estate. She is a widow and has three children all living outside of Philadelphia (PA). She spoke frequently of helping her children by leaving them her estate when she passed away. She was an apparently healthy and hearty 73 year old when she had a stroke. She had not signed a financial power of attorney or medical power of attorney.
After the stroke, she was no longer able to live at home, she needed to enter a nursing home and could not sign a power of attorney document because of diminished mental capacity. As a result, one of her children had to go to court to obtain guardianship over her person and estate. The guardian was not permitted by law to enter into Medicaid or Nursing Home Planning because that planning was deemed to be “detrimental” to the person over whom guardianship had been granted.
The guardian has therefore been spending $65,000 to $100,000 per year over the last 15 years on the nursing home fees, medications and related items. The guardian has just spent the last of the estate assets and her mother has just qualified for Medicaid at the age of 88. There will be nothing left to distribute to her children at her death.
Obviously, this is an extreme story, but it should serve as a wake up call to anyone who thinks “It won’t happen to me” or “I have enough money to cover the cost of Nursing Care” or “I have plenty of time to do Elder Law Planning.” You never know when the time for nursing care might arrive.
If you are a Pennsylvania (PA) resident or resident of another state, please take the time to consider Elder Law Planning now. You can sign a financial power of attorney that specifically authorizes Medicaid Planning and unlimited gifting. You can consider transferring some portion of your estate to a Medicaid Asset Protection Trust and many other planning opportunities. Understand your planning options now so you can take steps to help preserve your estate.
Read this article on early gifting to a Medicaid Asset Protection Trust. And this article on the Medicaid Financial Power of Attorney for some additional insight into these important topics.
Please contact Douglas L. Kaune at 610 933 8069 or dkaune@utbf.com to discuss your case and the planning options available to you.
