It never hurts to start planning to protect your assets should you or your husband require long-term care. Nursing homes can often run upwards of $100,000 each year, and if you're like most people, you'll need Medicaid to pay these costs. Medicaid looks at all your assets before determining your eligibility. You want to protect as much money as you can from these costs, and with a little preplanning, you can. Here are a few possibilities.
Draft Power of Attorney
Who handles mom and dad's finances if they are no longer able to do it themselves? Drafting a power of attorney is the best way to ensure that there is a seamless transition. Make sure that everyone understands who has been chosen to deal with financial transactions so that it will be as clear as possible.
Wherever you can, simplify financial processes for your elderly loved one. This could include:
- Having regular bills automatically withdrawn
- Grouping several payments together into one
- Ensuring that necessary parties--particularly the individual with power of attorney--understands what payments need to be made each month
Be Aware of Scams
There are new scams every day that are designed to prey on elderly individuals. Some of the most obvious include a scammer pretending to be a loved one in need of immediate financial assistance or scammers who attempt to gather bank account information by pretending that your loved one has won an award or prize. Make sure that you're aware of the latest scams targeting seniors.
Stay in Touch
You can know everything there is to know about all of the latest scams, but if you don't stay in touch with your loved one, you can't know if they've been targeted. Make sure you talk to them on a regular basis and check in with their financial situation regularly.
Keep an Eye on the Money
The more eyes there are on the money, the better. If one sibling or friend is responsible for all of the financial details, it's much easier for them to get away with financial abuse. Ensure that there are several of you watching so that there are always checks and balances in place to keep your loved one safe. You should also set up eyes at your loved one's financial institutions and place safeguards in place, including contacts that will notify you if any suspicious activity occurs.
Turn Assets Into Income
You need a financial planner to help you with this one, but you can turn your savings into an annuity that pays your spouse or other loved one a set income each year from the savings you use to buy the annuity. While the lump sum is gone, this does ensure that there is a set amount of money coming into the household for use on bills or to create new savings.
Pay Off Debt
It's important to note that Medicaid allows a spouse to keep half of any liquid assets and a small portion of the other half for the patient as protected assets. For instance, if you have $30,000 in savings, $15,000 goes to the spouse as half and an additional $2,000 for the patient. This leaves $13,000 unprotected. You can use this money to pay off credit cards, car loans, mortgages, and a variety of other debts.
Purchase Protected Assets
Using the same $13,000, you can use it to buy protected assets. It can go to a contractor for renovations to your home or use it to purchase a larger property. You can also use the funds to buy a new car for the remaining spouse. Another popular purchase is prepaying your property taxes.
Looking after your senior loved one doesn't just include their physical needs. You need to pay attention to their financial safety, too. Many of the issues of aging can be solved by providing parents with the support they need to continue to maintain their independence. The resources provided by Caring Senior Service can help. Get in touch with us today!