Looking for advice in planning for my parents, both in their 80s and living in New Mexico. They have virtually no assets except two properties: the house they live in (large, nice neighborhood) and a second inherited house where my brother lives rent free (small, dilapidated but on a huge property). They have a single combined mortgage.
So here is the dilemma. If my mom passes first, my Dad can live independently in the house until it is ready to sell and he can move into an apartment. But, if my Dad passes first it will be impossible for my mom to live alone since she has mild dementia. Her income after my dad passes won't be enough to pay for the mortgage and rent on another abode until the house sells. My parents refuse to move now to an apartment despite years of trying to encourage them to do so.
I am the power of attorney and executor when the time comes and their intention is to leave the second house to my brother who has been planning to buy it for years but can't ever seem to get his act together. I don't think my mom moving in with him is realistic. The house is a hovel/tear down really.
Outside of moving my mom against her will to live with me in NJ while we try to sell the house, are there any other options?
What is your dad's input on the matter? Does the municipality provide a social worker you might consult? At what rate is your mom's dementia progressing? Will your father still be able to care for her in a year or so if the disease substantially worsens? Were either of them combat veterans?
The best $25.00 you might spend is with an elder care attorney in New Mexico. Call the bar association in their county of residence and they will give you three referrals. The initial consultations will be free or $25.00. It would be best if your brother attends the consultation(s).
If you do consult such an attorney, go prepared with a list of assets and current expenses. Also, a list of questions you have. These will allow you to get the best information from the consult.
Sadly dementia gets worse. You need to protect your mother's assets in case she needs institutional Medicaid. She needs to gift both properties to someone else, like you or your brother. If not and if she needs to go to a nursing home then Medicaid will effectively penalize her to the value of the house.
There is a five year look back period. So even if you transfer, they will look back 5 years and force you pay for Medical costs out of your pocket up to the value of the house. After you pay that they'll then allow you Medicaid. This applies to any asset transfer. Which is why its important to transfer assets ASAP and hope that a nursing home is not needed in the next five years.
Don't assume you or other relatives can afford nursing home care for your mother. In N Y the cost is about 140,000 a year. Which is why Medicaid is needed.
Google "medicaid lookback."
ps - as JC said, see an elder care lawyer. And this means someone who know elder care law well.
A National Academy of Elder Law Attorneys (NAELA), Member
I'd agree that she should get that house transferred to your brother immediately. Even if he can't afford it, do it as a gift and let him be responsible for the taxes, etc. You can inherit more of the house they live in when the time comes to make up for the "gift" to your brother now.
If they or even just your father is living in the other house, that asset is generally protected.
Good points here. I should have mentioned that all of their assets, including property, are in a living trust. I am the successor trustee after my parents. However I do like the idea of somehow gifting the second house to my brother now, shifting the burden to him now. But...with the combined mortgage this doesn't reduce their expenses at all. They don't get a benefit at all.
The goal is not to reduce current expenses, although that would be good. The goal is to prepare for future escalating expenses and protect current assets. You already have consulted an attorney or you wouldn't have set up the trustee status. But circumstances have changes since then. Review this with a New Mexico attorney.
maybe they can sell the house to your brother for a small amount - maybe he can get a loan for even $10 or 25k. Your parents can use that $ to elevate some financial burden
My two cents regarding the transfer of the home. If your parents (or parent's trust) have a mortgage on the house, you might encounter difficulties transferring the house out of their name.
Yes, the trust was created about 18 years ago! We need to sit down with that attorney for updates. I think also a real estate attorney to see if there is any way to transfer or gift the house to my brother. Tough to manage at a distance but my brother isn't much in the way of financial planning or management.
You said your dad would sell his residence if your mom passes first. So then why would he not be willing to sell it now? Always better to do the move together as a couple, rather than after a traumatic event. Explain to them that if they stay in the house they would be leaving all the work and the trauma to the other one.
shoshannah said:You said your dad would sell his residence if your mom passes first. So then why would he not be willing to sell it now? Always better to do the move together as a couple, rather than after a traumatic event......
That one is a toss-up. Financially, it might be the better move. Emotionally, it may be traumatic for both parents, particularly your mom. Dementia patients do best, the less disruption in their lives. In any case, it sucks.
They won't listen to reason when it comes to moving from that house. It's been years of pressure on them through a variety of medical scares. They have seemed willing to do it at times, but once everything settles down, they change their minds. They have now told us definitively that they are staying. Period. This will all change when there is a medical or crisis or death, but they refuse to do anything unto they are forced to.
My uncle and aunt in rural Colorado are in terrible condition physically but are also digging in and my cousins are having a terrible time helping them from a distance. One cousin has had to reduce her work schedule to half time because she spends so much time with them (she lives in Phoenix). I think it is incredibly deluded and selfish, but they also won't listen to reason. Really sad situation and I'm headed there with my parents.
NizhoniGrrrl said:They won't listen to reason when it comes to moving from that house. It's been years of pressure on them through a variety of medical scares. They have seemed willing to do it at times, but once everything settles down, they change their minds. They have now told us definitively that they are staying. Period. This will all change when there is a medical or crisis or death, but they refuse to do anything unto they are forced to.
My mother did not listen when we told her assisted living is best. I found a few really nice places for her. But that's no help when she refuses. Since she wants to be at home, I finally managed to get her set up with 24 hour aide services.
Her dementia is getting worse and there will be a time when the medical decision is made that it is unfeasible for her to remain at home, even with an aide.
Which is a shame. Planning ahead with her cooperation gives us the opportunity to find a decent and better place. When its done in a crisis mode such as during a hospital stay or some other event they usually end being quickly pushed to where room is currently available, usually by far not the best choice.
Addressing the medical and social aspects, ensure that wills, enduring powers, advanced health directives etc are updated and in place. Make sure all insurance policies cover all updated states of health. (My FIL couldn't get decent travel insurance once he had the Alzheimer's diagnosis even in the very early days when he was still quite independent)
Everyone wants to remain in the place they love and worked hard to get, that holds so much meaning for their lives - it's not about logic or 'reason' but about passion, memory, fear and identity when the decision to overturn your life and abandon your home is 'forced' on you. Even by loving family, and by medical circumstances. The loss of control in this decision-making often shows in the worsening of other behaviours or disease symptoms, even in the quite fit. So allow your parents lots of emotional room to make plans and discuss what-ifs; show them how you'll beat their fears. (Be aware that you'll need to do this many times.)
Perhaps start by asking them what their ideal plans are, how they see all the different possibilities working out. Take them on the 'journey' with you as you try to cost and project-manage those plans, then contrast their plans with your more efficient/cost-effective/caring one. Let them see the benefits, and choose which sizzle and flavour they prefer.
(I have a 102-yr man living in the community with 24-hr companionship, 'supervised' by a niece on the other side of town. I have a woman in her mid-90s who should be in care, tried it for 4 days, and insisted on returning home - running her three children and their families ragged (her motivation for living). I have another the same age who refuses to leave her home because the son who cares for her has cancer - what kind of mother leaves a sick child?? (He's managing his treatment well and has good prognosis) I have a woman in her mid-80s living the community, assisted variously by 3 agencies and closely checked by her children and grandchildren, nieces and nephews - via phone, Facebook, FaceTime, visits. I have a married couple in their 80s, with a huge house, about to have a child and family return home again for a few years while the grandkids finish school... Lots of options, just need to get beyond our own assumptions and preferences)
Sorry if this sounds preachy - very early on Sunday morning, haven't had coffee yet
I'll never understand house attachment. It's a house. The best thing to do in later life is move to a cheaper place, easier to maintain and afford. You can still be there with all your stuff and everyone you love.
I'm basically a renter, so I also don't get it. But for many people it represents more than assets, it's The Castle.
(Why do I keep missing short words when I type??? Sigh)
I'd take a smaller castle and manageable bills any day. A home is a financial asset, first and foremost. People lose sight of that.
After several happy years, yep.
And then there's fear of change.
The home isn't what made you happy. But I digress. I feel for Niz and this situation. Definitely talk to an attorney and, as a first step, get that house transferred to your brother now and off their financial picture (hopefully for some cash to your parents)
tomorrow's NYT has an article re putting homes in trusts. Lots of legal pitfalls.
Thanks for your input. We've been having the same conversation for years. They are scared of change. My mom reasons like a child and my dad, who is very rational and realistic normally, is refusing to consider other options. He has been downsizing and working on getting the house ready to sell eventually, but he won't pull the trigger.
I'm going to concentrate on figuring out how to unload the second house to my brother as a first step and then we'll see if they start changing their tune. At least it will be one less thing to worry about in the future.
Re travel insurance, I can't speak for the Alzheimers situation, but my experience with those policies has been that if you purchase them when making the initial travel reservation (such as together with the airline reservation) or within a few days (10-15?) the policies state that they cover pre-existing conditions. I never have seen anything that excluded specific conditions like this, but perhaps I missed it since it didn't apply to me (?)
this is correct. When added at time of booking, most travel insurance covers pre-existing conditions. It won't after booking (like if you try to add it a month later)
Is it cruel to make the decision for them? What would happen if you said, this is what we're going to do, I'm putting the house on the market, and I've picked out a nice apartment for you? At some point it's past the time for them to be making decision, especially when it's obvious that the decisions are not rational. It's inhumane for them to be in a house that, by nature of being a house, needs maintenance and requires them to be aware of what's going on with the structure.
They can handle the house for the most part as long as my dad stays where he is at now with his health and driving ability. The argument I have been trying to make for years was stated above by another poster: let's find you a better place now while you can help make the decision and aren't dealing with a crisis, a place you can stay independent in longer (no stairs, not as isolated, closer to services and other people). Logical and sound reasoning. But...they don't want to hear it. He acknowledges I'm right but would rather stick it out and leave it to me to deal with a crisis-mode when the time comes. Big time denial. Plus, I can't force them at this point. I don't have control of their finances and I live half a country away.
They've also decided to stop traveling (air travel) because it is too stressful.
Guardianship is a vexed issue - and let's be honest, what we're discussing here, when we say 'may the decision for them' even they're capable of expressing their wishes, is legal guardianship. It may be benevolent. But it's still being imposed, and yes there are legal sues arising from that. So it really has be handled delicately, and from their point of view.
One thing that will help now is Hurricane Harvey: the power and destruction of this weather event is enough to make many people discuss how they'd cope if their utilities went down for a month, roads were impassable for three weeks, their roof/house was badly damaged/no longer habitable, etc. If you're in supported accommodation (even Independent Living within such complexes), evacuation and recovery support is easier. ["Dad, imagine starting over and having to negotiate with insurance claims people, builders and everyone for a year or more just to get back into your house - at your age. And most of your old neighbours would have moved!"]
joanne said:Guardianship is a vexed issue - and let's be honest, what we're discussing here, when we say 'may the decision for them' even they're capable of expressing their wishes, is legal guardianship. It may be benevolent. But it's still being imposed, and yes there are legal sues arising from that. So it really has be handled delicately, and from their point of view.
Guardianship is vexing and bureaucratic. Depending on the state, there may be burdensome reporting requirements.
I have a full POA for my mother. It means I can do her financials and other decisions (such as gifting, property transfers, etc.) without needing to ask. She can rescind my POA but in the state she's now in that won't happen. We asked our elder care lawyer about Guardianship and we were told not to bother, that the POA should serve.
Financial institutions honor POA's. Social Security does not. Instead, Social Security requires you apply for and become a representative payee for the disabled person. But then you have to submit financial reports to explain how that person's money was spent with their rules on how you can spend it. A POA gives you the power to handle the person's banked money without the representative payee burden.
ps - Three years ago my mother went through the paranoid dementia stage. Where she did not want anyone to handle her money but she couldn't. Her PCP, who specialized in Geriatric care, told her there are three ways that her money can be handled when she can't:
1 - Me.
2- A lawyer ($$$).
3- Adult protective services. He told her than can be very unpleasant.
How did we know she couldn't handle money? Doubled rent payments because she forgot she paid, catalog ordering stuff by phone that she did not remember ordering, cash in the house that she forget where she put it, etc. Its really depressing and sad.
Luckily we aren't there yet, but on my list of lawyer questions is changing the living trust so that I become the successor trustee after my Dad. Sure, my mom could "resign" voluntarily after he dies but we know now she can't handle financials (other than shopping for her clothes) so why put her through the stress of more paperwork when she is dealing with grief? Plus, I honestly don't want my brother manipulating her decisions. He is already not paying rent because he convinced her he shouldn't be because he was doing work on the house himself (he's done very little - his rent was already a steal).
if the house thebrother lives is the hovel you describe, I wouldn't spend too much energy being bitter over the rent. Let him have it and as full inheritor, you can can account for the disparity of him getting the house for "free" in how you divide the rest of the assets.
BG9 said:....Financial institutions honor POA's. Social Security does not. Instead, Social Security requires you apply for and become a representative payee for the disabled person. But then you have to submit financial reports to explain how that person's money was spent with their rules on how you can spend it. ....
The annual accounting is not that cumbersome. Their formula requires the distribution of S.S. allotment in specific areas: clothing, recreation, entertainment, education, savings and a couple of others. I was able to fill out the form with "0" dollars allocated to most of the categories and the full amount allocated to shelter.
I drafted a letter to indicate that my mom's mental condition precluded her participating in recreation, entertainment, education, savings and so forth. Furthermore, these were included as part of her assisted living fee. After expenses that went beyond SS monthly allotment, there was no money for any of the listed expense categories.
I sent the letter each year, just changing the date. I received no objection or further communication from the SS office.
I don't recall if I was able to set up representative status or if the elder care attorney did it for me. Local SS office should be able to answer that. It may also be online on SS.gov.
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