yyPLANNING WHILE OPTIONS EXIST IS IMPORTANT
Question: When my father (73) was first diagnosed with early dementia two years ago, not wanting to incur legal bills, my mother (71) bought mail-order power of attorney and will forms that she and my father filled out.
She took care of my father at home until he fell, broke a hip, and was hospitalized. The doctor told us that my father would be discharged for a short period of rehabilitation after which he would be admitted to a nursing home where he should remain because of his dementia and physical condition. We were happy to learn that Dad's Medicare and Medicare Supplement policy would pay for the cost of his care in the nursing home for up to 100 days, but after that, we found out that he would either pay privately at the rate of $3,500 per month or qualify for Medicaid.
I then learned for the first time that all of their assets -- the house, the car, $55,000 in Certificates of Deposit, and a $17,000 stock account -- were titled in my father's name. It was then that we found out that the power of attorney he signed did not allow my mother to transfer assets to herself in order to qualify him for Medicaid. Instead, unless we find a solution, he will have to spend all but $2,000 of the money accumulated during this 53 year marriage before he can get assistance. If this happens, my mother would be left with nothing. We live in a small town and can not find any answers. What can we do to try to protect her and to allow her to have her share of what they have accumulated during a 53-year marriage?
Answer: Generally speaking, in order to qualify financially for Medicaid, the nursing home spouse (here, your father) can not have more than $2,000 in countable assets and, depending on your state of residence, the community spouse (here, your mother) can have not more than $79,020 in countable assets. Since gifting between spouses does not result in periods of Medicaid ineligibility, had the power of attorney contained appropriate gifting provisions, all assets -- including the house -- could have been transferred to your mother who, as community spouse, could have sheltered the vast majority of the assets so that your father could have qualified for Medicaid very quickly.
But since your mother can not make gifts, there other vehicles that can be used. We believe that your mother should contact an experienced elder law attorney and seek to be appointed as your father's guardian in the probate or surrogate court. While incapacitated persons have been denied the opportunity to use Medicaid planning strategies in the past, more courts are adhering to the concept that to not allow a guardians to do Medicaid planning for an incompetent person amounts to a denial of equal protection since the incapacitated person should have the same options as competent individuals.
If this does not work, your mother may consider using the family court to seek her share of the assets and income accumulated during this long marriage through an action for property division and support.
Your mother's situation is precisely the reason we urge all elderly individuals not to use mail order "fill-in-the-blank" forms and computer programs when it comes to probably the most important document that middle income Americans need, especially when there is a spouse left in the community: The durable power of attorney. The cost for a competent lawyer to prepare these documents with appropriate gifting provisions would have been much less than what it will cost to try to extricate your mother from a very thorny situation.
SoloFact: Today, 22 percent of elderly unmarried women live in poverty. Why? According to governmental studies, the explanation includes such factors as 1) women tending to marry older men, 2) women having longer life expectancies, 3) women experiencing a number of years of widowhood, 4) women spending fewer years in the workforce than men, 5) women earning less than men, and 6) women having less access to private pensions than men. More about this study and how it can be used in divorce cases involving elderly women can be found at no cost at the
