Deciding to place a partner or a parent in a nursing home is often heartbreaking and financially overwhelming. In cases where the parent has dementia, unfortunately, there are often limited options. Dealing with a parent’s estate and finances in this situation can be daunting. Having a plan in place before decisions need to be made is crucial to saving time, money and helping to limit the emotional toll.
Have an Estate Plan
If your parent can still be deemed competent to sign legal documents, it is imperative to complete a basic level of estate planning, such as a Power of Attorney and Last Will and Testament. If your parent has been diagnosed with dementia, they may still be able to sign legal documents. However, if your parent is in the later stages of Alzheimer’s, he or she may no longer be legally competent. Each situation is unique.
Power of Attorney
When a loved one previously executed a General, Durable, or possibly Springing Power of Attorney, it is significantly easier for an adult child to handle his or her parent’s finances.
For example, if an ailing parent provided an executed Power of Attorney, the named person could write checks, make withdraws and handle all financial matters on behalf of the parent. This could even mean obtaining a reverse mortgage or other financing options to help pay for the nursing home.
Remember, when a General Power of Attorney is signed and witnessed, it takes effect at that moment and the person named can then control your finances, so in all cases, make sure to pick a trusted child or relative.
Not Having a Power of Attorney
Unfortunately, far too many older adults endure dementia without having a Power of Attorney or Will in place. In those cases, it is far more challenging for the person’s loved ones to obtain control over assets that may be necessary to pay for nursing home care. Adult children, in this situation, must often seek the intervention of the courts to access assets and make decisions for their parents.
Long-Term Care Costs
Nursing homes or long-term care facilities are costly. According to LongTerm Care.gov, the cost for a semi-private room in a nursing home in the United States is $6,844 per month, or about $82,000 a year. For a private room, the cost is $7,698 per month or about $92,000 annually.
Insurance
Another issue to address before the parent loses his or her ability to make decisions is to consider long-term care insurance, or to enact the insurance if your parent already has it. Long-term care insurance specifically covers the expenses not covered by healthcare insurance related to care and daily living.
Don’t Wait
While it may be uncomfortable to discuss long-term care insurance with a parent, it’s a conversation best done while they can still make their own decisions. Waiting until a crisis arises can be devastating financially and emotionally.
Medicaid for Long-Term Care
In some instances, families are forced to sell property or utilize other assets that are part of the parent’s estate to pay for the nursing home. However, if there is not enough money in the estate or it is part of an irrevocable trust, one option is to apply for Medicaid.
Medicaid is the primary provider of long-term nursing home care in the United States. At its core, Medicaid is a federal and state funded health insurance program designated for low-income individuals. Although benefits vary from state to state, Medicaid does cover nursing home and some very limited home healthcare services.
Medicaid, however, does not always cover extended care, even if an individual qualifies. You might have to pay part of the cost for the nursing home care depending upon income and net worth.
If one needs to apply for Medicaid on behalf of a parent, it would be wise to begin the process immediately upon learning of the need for any long-term nursing home care. Since your eligibility could be impacted, it is also essential to know about the Medicaid 5-year-look back that pertains to any gifts or transfers of assets made within five years of the date of application.
Contact us at Gentreo.com to learn more about how we can help you create a simple and affordable health and estate family plan before a crisis arises.
Don’t wait until it’s too late; start your estate planning journey with Gentreo today. By doing so, you’ll not only protect your loved ones but also gain the peace of mind that comes with knowing your legacy is secure. Click HERE to join now.
This article is for informational purposes only and should not be considered legal advice. Consult with a qualified attorney or estate planning professional for personalized guidance.
