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At least once a week, someone will post a question on this board that basically amounts to asking how to “protect” some parental asset or amount of money and still apply for/qualify for Medicaid. Inevitably, such a poster gets jumped on by numerous people replying that trying to protect assets is “cheating” and grossly unfair to other taxpayers.

I’m not so sure. I'm not advocating trying to circumvent the system -- but I would like to start a discussion about whether it's immoral. I’d like to explain why I’m not so sure, and then I’d like to know what other people think.

Imagine two identical families. We’ll call them Family A and Family B. In both families, Mom and Dad work. Both Parents A and Parents B have identical jobs and identical incomes, and both families have three kids.

That is where the similarities end.

In Family A, even before the kids are born, Dad and Mom scrimp and sacrifice to save money. This an old-fashioned phrase for an old-fashioned concept, but Dad and Mom are 100% dedicated to it, and their commitment does not change as the kids grow.

The family goes on vacation every third year instead of every year. These vacations are usually “road trips” and involve camping in tents and peeing in terrifying, spider-infested outhouses to save money on hotels. Getting to eat out once a month is a huge treat, and usually occurs only at low-end chain restaurants with a mid-week “kids eat free” night. For their entire public-school education, the kids dress primarily in clothes that their mother sews by hand instead of wearing clothes bought from the store ... and sure, maybe they get teased and made fun of at school, because they’re wearing polyester pants instead of blue jeans, but Mom and Dad decide it’s a worthwhile sacrifice because the money that is being put away will make a difference in the kids’ lives later, when it really “matters.”

The family drives a beat-up old car that Dad manages to keep running year after year because hey, maybe the upholstery is all split open and the windshield is cracked, but at least it’s paid for. Cable TV is out of the question, so if a show doesn’t come in over rabbit ears to the family’s one small TV in the living room, no one watches it.

The house, which is uncomfortably small for the family and not in the best neighborhood – and which certainly does not feature hardwood floors or a kitchen with granite counters or stainless steel appliances! – is one that can be managed on a mortgage that still leaves a fair amount of each month’s paycheck available to go into savings instead. The family COULD qualify financially for a “nicer” place, but Dad and Mom believe that it’s better to put the money away so that it will be there to make a difference for their kids down the line – maybe by buying a college education or by helping them to buy their own homes when the time comes. Everyone sacrifices, sacrifices, sacrifices. Eventually, even the modest mortgage is paid off. Gradually, the little nest egg grows.

In Family B, by contrast, just about every dime that ever comes in is spent immediately. The family motto is “Instantaneous Gratification Isn’t Soon Enough!” The family denies itself nothing, ever.

The whole family goes on vacation to Disney World every year, always staying at an official Disney resort (where the kids get their own room). At home, all the kids have their own TVs (which get every premium channel imaginable), laptops and iPads and get new iPhones every time Apple releases an “upgrade.” Eventually, the kids get driver’s licenses, and guess how the family celebrates this rite of passage? You got it! Mom and Dad buy them their own cars. The family eats out at nice restaurants three or four times a week. The family car is replaced at least every two years, and loaded with every option the family’s creaking credit score can support.

The kids get designer clothes and shoes and the latest video games and pretty much whatever else they want at every gift-giving holiday. The family lives in a huge house in a nice neighborhood, with a pool and a hot tub, and yes, they’re carrying a lot of debt on their credit cards, and yes, they’re quite a bit overextended on the mortgage and the car notes, but what the heck – isn’t that the American way? Sure, there’s no nest egg ... but what does that matter? Living life in the moment is what it’s all about.

Fast-forward. Dad is now 75. Tragically, Mom died 6 years ago from cancer, and Dad has now been diagnosed with a progressive dementia, and will likely soon need very expensive long-term memory care in a facility.

In Family B, there are next to no savings. After retiring, Mom and Dad B traveled a bit, and spent every dime that came in in pension and Social Security income. After Mom B died, the overextended mortgage on the house turned completely upside down, and Dad B abandoned the equity in the house and walked away ....

(Continued in Part B, first post)

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(continued from Part A, above)

... Dad B lives in a small apartment, and covers the rent with his small pension and Social Security income, but these are nowhere near sufficient to cover the monthly costs of the care he now needs, and may require for years. Since he and Mom B has never sacrificed to save anything, Dad B has very little to show in assets for his years of earning.

Family B applies for Medicaid and sets up a Miller Trust to satisfy Medicaid that whatever income Dad B DOES have will go to his care, and presto! The bulk of the cost of Dad B’s care is immediately and hereafter funded by taxpayers. Who do not, on the whole, call Family B “cheaters” for applying for public assistance to pay the outrageous cost of memory care, since, after all, Dad B is “needy,” and Family B didn’t try to “stick it to the taxpayers” by shielding any money that could have gone to Dad’s care (at least, not within the last 5 years ... and I guess we’ll all just agree to turn a blind eye to the previous 50).

In Family A, on the other hand, there ARE savings – not savings that have somehow magically rained down on the family as lottery winnings, or capital gains from a lucky investment, but that have been painfully built through literally DECADES of sweat, scrimping, self-denial, and significant sacrifice. To Family A -- which has postponed or entirely given up nearly every one of the everyday luxuries that Family B consumed with mindless joy for the past 50 YEARS – Medicaid now demands that the family spend every dime Mom and Dad ever saved before it will offer even the first penny in help.

What’s more, if anyone in Family A even dares to ask if there’s any way to hold onto a little of what Mom and Dad gave up so much to build, many people now say, “How dare you ask that! It is evil and immoral for you to try to ‘protect’ any of your parent’s nest egg before asking us for help! Our help is only for people who really need it! Like that nice man over there from Family B! Anything you try to do to shield even a tiny bit of what you’ve saved so that it goes to the family you saved it FOR is CHEATING, you evil, cheating CHEATER!”

This may sound like an exaggerated scenario, but I have seen it personally – and it is why I don’t find the question of whether shielding assets is “moral” or not to be as cut-and-dry as others seem to. I’ve painted an unpleasant picture of Family B here ... but did they really do anything wrong? Don’t we all have the right to spend and enjoy what we earn? But if so, given all that Family A gave up to hold onto that money, do we really have a moral right to demand that they sign over to a nursing home everything they sacrificed to save for their children before we will give them the same assistance we immediately give to Family B, which never sacrificed anything (and is not now being called upon to make up even a little of what they spent over the years before we agree to step in and carry the burden for them)?

Remember, both families are also taxpayers, and have poured an enormous amount of tax money into the system over their lives. Remember, too, that Medicaid does not provide for a particularly luxurious life style or high level of care or comfort ... if you can afford to pay for better care, it is nice to be able to do so.

Wonderful Aging.com poster JeanneGibbs (we miss you, Jeanne!) once posted on a similar thread that “fair” and “unfair” had little to do with health care issues. She was absolutely right. But I’m starting this thread because I’m curious to know how other people see this ... and if anyone else agrees that the question of whether it’s right or wrong for people to try to protect assets maybe isn’t as black and white as it might seem on first glance?

I think we have a tendency in this country to resent other people’s “wealth” (which I use here simply to mean whatever someone has that is more than we have). It’s human nature to tend to assume that someone who has more than we do must have just been luckier rather than to consider that they might have worked just as hard as we do, and then denied themselves in order to save the money for later ...

Anyway, thanks in advance for your responses. I'm interested to hear what other people think.
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I have to agree with you and this why....My parents both worked full time, high school educations...they had 4 children. With both parents working, the most they made together was $35,000 a year. They owned their home, my mom worked for a bank so she stashed money away in T-bills and an IRA. Dad worked for a family owned hardware store. His boss was very smart...he had profit sharings for the employees and money was invested by Merrill Lynch. My dads retirement portfolio was much larger than mom's even though the bank invested money in their own stocks. I am 55 years old, while growing up, we did not have a color TV until I was 10 years old, central air was added to the house when I was a teen. Wall to wall carpeting was added when I was 13. I am the youngest of 4, and was the only child living at home when I was 12. My parents scrimped and saved, live frugally all those years. We had one vehicle until after I was married and out of the house. My dad bought a truck that was used. He knew many almond farmers in the area and made contact with them to cut up down trees for firewood in the fireplace. Our family vacations consisted of tent camping in the mountains for a week once a year and mom would make spaghetti sauce in advance to freeze to take with us plus my dad and brothers were avid trout fisher's so we ate lots of fresh trout during that week. You get the picture.

When dad developed Alzheimer's Disease, mom found out about an Elder Law Attorney the Alzheimer's Aids Society recommended. She went to see him. He set up a living trust for the house, and when dad was diagnosed as mentally incapacitated, he and mom went to court. Everything was put in mom's name so that medicare could not come after her for repayment when dad passed away. So basically it was hidden. The reason the attorney did this was so mom had money to live on and still have a life even though dad was now in a nursing home that medicare was paying for.Dad passed in 2003, from 2003 to 2012, mom had only spent $50,000 of the hidden money for her needs and living expenses because she was budgeting on getting by on her SS which amounted to $1,300 a month!! In answer to your question, I see nothing wrong with this because it allowed my mom to live as she was accustomed to living frugally. Medicare did try to come after her for about 3 years after dad passed, but my daughter sent an email to our Congressman about the situation and he stopped Medicare from harassing my mom on a yearly basis for records regarding dads care,etc. Without my mom's attorney doing things this way, my mom would have lost everything, and she would have had to rely even more on social services ( the tax payers) for her livelihood. I believe it is right and just. My mom is now 84 years old, is mentally incapacitated due to Alzheimer's Disease.and is living in a memory care unit. Mom had the foresight to take out a Long Term Health Care Policy because 3 of her siblings developed Alzheimer's. This policy is currently paying for her care and will continue to pay for 4 years. Because of drugs like Namenda and Aricept used together, mom will most likely live longer than dad did once he was placed in a NH, when the LTC policy runs out, she will have the money from my dad's employer that was invested with Merrill Lynch to continue to pay for her care. Is it fair, YES...she is footing the majority of the costs not social services but if the money was not hidden, social services would be footing all of it. Not all will agree with me but really, family B got more services from social services than my mom did or will in the end.
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I must add, that the $50,000 my mom spent...most was because of the mandatory yearly withdrawal from the IRA.
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I'm really torn on this issue. My mother, at this point, has a very substantial estate. If she has to go into a nursing home long term, depending on the costs, I'm not sure how long that will last. She would not qualify for Medicaid and does not have long term care insurance. I'm going to do my best to keep her at home as long as possible both because that's where she wants to be and because that's where we can best preserve that estate.

On Medicaid, I think there should be a 3rd family listed. There's a girl that gets pregnant in high school. She has her kid, gets a job at the mall, or a fast food place, maybe if she's lucky in an office somewhere. She gets minimal if any help from the yutz that got her pregnant. She struggles to put food on the table and shelter over their heads. At some point, she ends up with another kid or 3. Maybe she even gets married and divorced a couple times and gets more than minimum wage. Maybe she gets up to $30K a year with 3 or 4 kids. I used to see it all the time. She can't put any money in savings. She can't go on any vacations at all. God forbid one of the kids gets sick because she can't afford health care. Retirement? She's just trying to survive. That is who Medicaid is for, really - the poor, struggling people.
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I agree with you equillot...my sister married at age 17, she was pregnant to her high school sweetheart. Six years later with 2 kids in tow, sis divorces husband because he is a druggie. They did manage to buy a modest 3 bdrm home that sis was awarded in the divorce.. She immediately got tied up with a man 13 years older than she who live 4 doors down from her. They dated for 2 years before getting married. He made lots of money, they moved 45 minutes drive from here and bought a large home with a large yard, nicely landscaped with a deck and sunken above ground pool. Within one week of their fairy tale marriage, he started beating my sister. We knew nothing about this since they lived 40 miles away and sis threatened her daughters not to tell us. Sis was taken to emergency a few times because of his beatings. After my sis's first divorce, she got foodstamps and some monetary help for babysitting services so she could work. After sis's second divorce, she refused to go on foodstamps again, she again was awarded the big house in the divorce. She did not work during the 6 years of marriage to her second husband. Now she had to find a job, she was renting out the modest 3 bdrm home here in town. She decided to sell the modest home, keeping the larger home. She lived on the money from the sale of the house while she went to school for computers, which she ended up not finishing the program, instead she got a job in an office She also had a second income working as the bookkeeper for the campaign manager of the congressman for our district. She lost the second income when the congressman retired from politics in the early 90's. Her job has a retirement pension and health insurance. Now upon the second marriage failing, sis was now an alcoholic, she immediately got tied up with another man around 11 years older than she, he also was making good money, had received a large inheritance from his aunt. In the meantime, my sis is also getting a lot of monetary help from my parents. Sis and her current man, manage to go on many weekend trips staying in very nice hotels in the Lake Tahoe area, Half Moon Bay. Whenever sis needed work done at her home, such as re-landscaping, painting the inside of the house, she would make it a party, supply the food and drinks while the men did the bulk of the work. Sis continued to see this man for 15 years before she got tired of his antics, turned out he was schizophrenic. By this time, all sis's friends have faded into the sunset, she now needs to replace the pool in the backyard, needs a new roof. My dad is getting older he can't do the work for her. She refinances her house to get this done because maintaining this large house and yard is expensive. Sis now alone, her daughters are grown and moved away. She continues drinking until her health went downhill in 2008. She now has stage 4 diabetes, low blood pressure which limits her activity. She is 5 years from retirement and her house is still not paid for because of refinancing twice. She is paying for a lot of bad choices and how she will manage when she retires...I don't know.
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I know one girl, in her late 30's now, has 3 children, all by the same father. They were married about 2 years after the first one was born. The father had lots of problems - alcoholic, ex-con, couldn't hold down a job. They finally split up after years together. She's got minimum wage job - no support with him, because he can't hold down a job long enough to collect. She lived in subsidized housing, but wanted to try to buy a house, but once you go on the program for that, you have a certain length of time to do it, and then you're out of the program. She couldn't do it. So now she's living with a guy (it helps pay the bills). She didn't make wrong choices in her life, other than who she fell in love with originally. There was no partying. She lives frugally. Her kids get clothes from Goodwill, not Macy's. She shops at the Dollar Store. Her oldest son just went in the Job Corps, so hopefully he can learn some skills and not end up as poor as her. There's no way she could send him to college.
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I believe morals are personal so everyone doesn't have the same morals.

Some people never apply for state or federal aid due to their own personal morals.

Ethics are determined by others. Currently people are able to "protect" their assets as long as they give them away in time, and that time could always change.

I have a moral problem with children who pressure their parents to turn over their assets to them "so the government won't get the assets". Surely no one likes to be pressured to turn over their personal belongings and assets.

My sister hounds my mom about her assets. I guess her morals don't have a problem with such harassment. She even told my mom once that mom's beloved old doll would have to be sold after mom died because "everyone will want it". My poor mom was so upset that she gave the doll to my sister's grandchild -what a crazy coincidence eh?
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Immoral or unethical? The bottom line is that if you are deceptive you are both immoral and unethical.
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When you start bringing morals into it you start judging. I don't agree with how my sister lived her life, but I do believe she did what she felt she had to do to provide for her children. It was what she knew to do....if you read my profile you will understand what I mean.
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To me there's a big difference between the rich, the poor, and the "getting by", which includes most of us. The rich have lots of ways to shield their income. It would be immoral for a multimillionaire to dispose of all his assets and go on welfare.

Notice I say multimillionaire. Lots of two-earner households in expensive real estate markets get to be millionaires based on a $600,000 house. But even spending that entire $600,000, it would cover 6 years total in a NH. That economic class can provide for their own living expenses, but feels a real pinch when dealing with a $200,000 college education or $100,000 a year NH bill.

The state one lives in determines how much value in the home can be shielded from Medicare. I believe there is a value to our republic when a citizen is able to hold onto economic independence. I believe that allowing someone who has worked hard to acquire assets to be able to pass them on is good for our national morale. The more people in the country who can live a middle class lifestyle, the better for the economy, the crime rate, and public health.

What people are doing is legal. I'm all for "class warfare", which means going after the income of the extremely rich, and leaving alone my neighbor, who happens to earn even 50% more than I do.
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I find older folks have not generally planned ahead. It's like they just don't want to think about it. There are legal ways to protect family assets. Parents need to think of it that way "family asssets" not "my nestegg." I know at 62 and 66 and with not a large amount of assets, I am pushing my husband to legally make sure there will be something for our children and grandchildren.
This is especially important because dementia is common is his family. His Mom put her money in trust thinking that would secure it from paying for her care in the future should she need it, but it is not the kind of trust that will do that. Her hard earned money will go to her care unless she dies before it runs out. But it isn't the governments fault.
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People that put money away to save for the future should also plan for the retirement in a care facility IF they plan on leaving something for their children. With health care costs they way they are today, financial planning is not complete without that piece of the puzzle. When Mom told me that her financial planner told her that it was "too expensive", and that "most people don't spend more than 3 or 4 years in a nursing home", all I could think of was how much cheaper the policy would have been.

I didn't mean to offend anyone here. Like I said, I am very conflicted about this issue. My husband and I live paycheck to paycheck. We don't have enough money left over to buy care insurance. I have no idea how much (if any) of Mom's estate will be left when she goes. What there is will have to be divided with my brother, and that money, with my husband's ss and my minimal ss, will have to support us for the rest of our lives. So yeah - whatever is left I don't want to have to give away to get on Medicaid. On the other hand, If I've got funds to use to pay for my own care, and the guy down the street doesn't have a pot to piss in, he should be the one to get the free care. And that's what it is - it's free room & board & medical care. Nursing home welfare. Let's call it what it is.
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Here's the assumption that so many people seem to make – mom and dad scrimped and saved NOT so they could be secure and cared for in their non-working years, but so YOU could inherit their money.
Once you turn that on it's ear, the way you view whether or not shielding assets is immoral becomes moot. Which is as it should be, because the government (though some loudly disagree) does not belong in the business of telling people how they should live their lives. They are in the business of providing a safety net for the circumstances someone is in right now.

So, here's how it works... the high-living old man in scenario B is now poor. Whether he had money and squandered it on luxuries or had some but had it swindled away from him as he sunk into dementia, the circumstance of his poverty isn't changed, only your judgement of him. He is destitute and, if his family won't care for him, he needs the help of a social safety net or you and I will be stepping over his body on the street (like in a third world country).

The person in scenario A has a hard-earned and sizable nest egg. If they decline slowly and need support with their daily living, they have choices (unlike the guy in scenario B). They can choose a swanky AL or a modest one. They can move in with one of their children. They can hire home helpers and stay in their home.

You'll notice I didn't say anything about inheritance. That's because this has nothing to do with whether or not their kids get any money when they die. If it's important to them or their children that the bulk of their assets are left behind when they die, they can assure that by having their children provide the care they need.

Why would the taxpayers support someone who has the assets to support themselves? That's just not logical. Food is expensive and I want to be able to leave money for my children. Should I be able to get food stamps even though I make a comfortable middle class income? I can afford to pay my mortgage but I want to leave money for my children, should I be eligible for subsidized housing? Of course not. Safety net programs are for poor people. Period. How they got poor isn't the business of the government. However, the government is in the business of ferreting out those who would illegally hide their money in an attempt to cheat the taxpayers.

The Medicaid rules (complicated as they are) provide for many legal ways to protect some assets. By all means, families should avail themselves of them.

People who have some kind of perverse jealousy of the 'riches' being bestowed on Americas poor really puzzle me. I can only think they aren't truly understanding what it means to be eligible for those programs; that if they look at the whole picture they wouldn't begrudge those people at all. Regardless of how one gets there, being poor is no place anyone wants to be.
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You haven't offended me. Life is hard, and I can't help but feel it is harder today than when my parents started out simply because you could get a full time job and the majority of companies offered health insurance and a pension plan. When I started working in the late 70's all that was changing, and by the 80's (I blame Ronald Reagan), less companies offered health insurance. I had one job in the late 70's that offered health insurance and I didn't have to pay for it, the company did. Unfortunately, I lost that job due a lay-off in the early 80's during a recession. All the jobs I had after that...had no health insurance or pension plans to offer their employees.I have only SS when I retire. My husband has been much more successful than I. The job I have now is a union job...I have health insurance but only work part-time, not by choice...it's all they offer unless you are in management. It has only been the last 4 years that we stopped living from paycheck to paycheck too. I was able to get a LTC policy because Alzheimer's runs rampant on both sides of my family. I pay it out of my income. I decided I didn't want my husband or children losing their income, homes or marriages ( my children's marriages) to take care of me. The most we will have to offer our children as an inheritance is them splitting the sale of our house.

My parents on the other hand, leaving an inheritance is more important. It has a status attached to it. However, people are living longer now and will continue to do so as medical science advances. Whether I get an inheritance from my parents is really iffy...it would be great if I did...but...my mom's care is more important and if she needs that money for her care, then that is what it will be used for. I personally am not counting on it because she is taking Namenda which has stabilized her decline and I expect her to live longer in facility care than my father did. Like you, I believe we all are responsible for providing for our elder care, not always possible. When we do plan and make provisions for our own care, sometimes life happens that throws a monkey wrench in the works with an unexpected illness that comes out of nowhere. This has happened to my brother (not going into details), but I feel angry about his situation...it isn't fair..but it is life.
Hugs to you and everyone who has posted!!
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Isn'teasy~you said it well. What my mom did was legal, to some it may not be moral, but she did what she did so she wouldn't be living in the street or us, her children, going bankrupt. You said it well!! Hugs to you!
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It's a delicate question, to be sure.

Equillot, you're absolutely right -- it seems as if buying LTC insurance is the only way to have any hope of leaving anything substantive to one's kids if one is unlucky enough to develop a progressive dementia ... even though statistically most people don't spend more than a couple of years in nursing care at the end of their lives. But I can't fault today's seniors for not having foreseen how catastrophically expensive long-term care would become. Those costs are so much higher now than they've ever been, and ESPECIALLY memory care ... plus, there's the escalating incidence of dementias as overall life spans lengthen.

And then there are those seniors who DID buy long-term care policies in the last 20 years from insurance companies that went under, or that fail to pay claims at all reliably. I've read some true horror stories on the Web. My husband and I are lucky enough at this point in our lives to be able to pay a substantial amount each month for LTC insurance, even though we're in our early 50s. I don't worry that we won't need the insurance -- if we don't, great! :-) -- but I do worry about the risk of having poured all this money into policies that simply don't turn out to be there, for some reason or other, when/if the time comes to use them. And I worry about losing our jobs to the point where we can't afford to keep paying the premiums. Then we're out both the insurance AND the money we could have used for care. But not to buy the insurance feels even more risky, given the escalating costs of such care and our family medical histories. :-(

OncehatedDIL, you're absolutely right that people should not pressure their parents to turn over assets. I think most of us who have had to take over any degree of financial responsibility for a parent or loved one with dementia struggle continuously with whether we're doing the "right thing" ... I have to watch out for my Dad's money, because if I don't, he forgets to pay his bills ... forgets to respond to the IRS ... pays cash multiple times to the same contractor ... misplaces checks to be deposited ... overdraws his account ... gives money to shady organizations (by which I mean organizations that rate little better than scams on charity-rating sites) and on, and on, and on. A year ago, he dreamed that he proposed to a caregiver he'd known for a week and a half, thought it was a memory, and was perfectly prepared to carry through, knowing nothing about her background or finances and very little about her personally (for instance, her last name, age, whether or not she had children, and so on). Thank goodness this particular caregiver was a very above-board person who would not and did not take advantage of a confused elderly man in a vulnerable spot ... but I think we've all read about situations that did not turn out so well.

I know it's in Dad's best interests that I look out for his money, to ensure that there's as much available for his care and comfort as possible. But at the same time, it also makes me uncomfortable to be so involved, because there's no denying I have a financial interest of my own in not seeing the money lost, stolen, or wasted ... first, because the more he has in savings, the less likely I will be to have to kick in to cover care ... and second, because anything that is left at the end of his life (which is unlikely to be much if anything) will help to pay for my and my siblings' eventual health care needs.

Sharynmarie, your parents and childhood sound very, very familiar to me. ;-) I'm glad things worked out well for your family in this situation ... I'm pretty sure that what your parents and the lawyer did for your Dad and Mom back before 2003 would not "work" to protect assets today. Timing is everything.

Perseverance, I'm not sure what it means to be "deceptive" in this instance. The law allows what it allows, and does not allow what it does not allow. In this discussion, when I refer to "shielding assets from Medicaid," I am specifically speaking of protecting assets in a way that is allowed by the letter of the law, but which I think the government clearly desires to prevent -- which amounts to giving away assets more than 5 years before applying for Medicaid, or transferring money via personal care contracts, or spending money on personal property that is unlikely to be subject to Medicaid estate recovery. These methods of asset shielding are legal. Are they deceptive? I don't believe so. Are they moral/ethical? That is the question.

I know this is an uncomfortable subject, and I really appreciate the posts and perspectives from people who have responded. I'm still torn myself ... not because I don't agree that the guy down the street who doesn't have a pot to piss in and therefore "needs" the free care should get it ... but because I'm not comfortable telling people they have to spend everything they have sacrificed to save before we'll give them the care we'll immediately give free to people who have saved nothing. And yes, I understand that some people just cannot save or blow through their savings, due to physical or mental illness, job loss, bad luck, etc. ... I, too, have a sister who found herself by herself with two small children to support at a very early age, and it has taken her most of her adult life and best earning years just to find her feet. But I've also seen plenty of scenarios where people COULD save if they were willing to sacrifice even a little ... e.g., skip the daily Starbucks, buy the smaller house, drive the old car for another few years, etc. ... and don't. It seems a bit unfair that they should get to have their cake and eat it, too, while the folks who carefully saved their cake to enjoy later get it taken away from them completely.

Okay, bad metaphor. Now I'm hungry for cake ...! ;-)
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I think I do understand the dilemma. Its an "anti common sense" thing that is happening in our capitalist society, but Medicaid is a socialist implementation. I do believe future generations will come up with a solution.

For now, is it "immoral" to shield assets? No, I don't believe it is at all. I also believe that we come into this world with nothing and we leave with nothing. So spend every last little bit that was saved getting the proper level of care for your loved one. Then, rest assured that they will be taken care of by Medicaid after that.

The point of saving up was that these elders COULD have care in their old age. As long as we accomplish that, we're meeting the goal.
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I forgot about a really important concept that I hold as "truth" in my own life.

Family A had a truly better quality of life, and taught their children what real strength and love were. Family A's decedents are better off for living a life of challenge and frugality. These people have extra amounts of patience, love, and generosity to give to the causes and people they care about. They will perpetuate these ideas into the future.

Family B's kids are brats and never learned to deny self gratification for the pursuit of anything more long term. Family B's decedents are a bunch of failed relationships and people full of anger, resentment, and jealousy who don't know how to overcome in their lives. These people don't know that real greatness comes from inside each and every one of them, and they don't need anything material to give them happiness or love.

This is karma in action. I personally don't believe in organized religions of any kind but I do believe in karma.
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IsntEasy -- thank you, sincerely, for a very thoughtful post and perspective, which I didn't mean to ignore, but didn't see until after I posted my last response.

You raise a very interesting and valid point that questioning (or even exploring) a person's route to poverty amounts to "judging" the poor. Perhaps it does ... and if so, you're absolutely right that it's not a particularly useful exercise. You're also a thousand percent right that the programs designed to help the poor in the country hardly amount to "riches," and that it would be not only perverse but pathetic to envy anyone his being in a position to qualify for them.

I think the frustration some taxpayers feel when they see abuses and corruptions of the programs that are designed to help the poor -- and we have ALL seen such abuses and corruptions, many of them first-hand -- is not "jealousy" so much as "resentment." This is particularly likely in the economic classes where even middle-class taxpayers are bombarded daily by messages in the media that they are somehow "not paying their fair share" in spite of drawing nothing out of the system and paying thousands (or even tens of thousands) of dollars into it every year .... with all signs pointing to ever heavier tax burdens on the horizon.

Add corporate welfare to the burden these taxpayers are paying ... and escalating health care costs ... and filial obligation laws ... and rising education costs ... and shrinking career advancement opportunities ... and the likelihood of ever-worsening health care, and withering retirement funds ... is it any wonder that the anger and resentment -- at the poor, at the rich, at government policies that seem designed to help everyone but the people in the middle -- grow?

I think this frustration is contributing to people's desire to "hang onto" whatever they've managed to build ... first, as you say, absolutely, for themselves ... but then, yes, for their families. From a lot of what I’ve read on this board, those very unlikely (unearned! undeserved!) “inheritances” that we all so often speak so scathingly of are often all that stand between a person having a place to live and being on the street ... or having some hope of paying for their own long-term care when the time comes.

Yes, in spite of these problems, I agree -- it's FAR better to worry that your 401K is worth half of what it used to be than to wonder where you're going to sleep tonight, or when your next meal might happen along. It's FAR better to worry about whether you'll be able to afford long-term care in 20 years than to worry about whether you can find an ER that will treat your walking pneumonia right now. It's FAR better to grumble about having to work out a payment plan with your endodontist than to have a chronic molar infection blow up out of control.

Still ... I'm just not sure it's ever safe to ignore the fact that the middle class is being squeezed from all sides. :-( Pressure cookers can explode. No, absolutely, this is not the fault of "the poor” – but it’s still dangerous to ignore. When a cooker explodes, everyone in the vicinity can get burned.

I'm sure it's different for every family, but in my family's specific case, you're absolutely right -- I don't believe my parents scrimped and saved first and foremost so that they could leave money to their kids and grandkids (although I know it was very important to my mother, in particular, to be able to do so). She was very much afraid that my father would die young of heart disease (which runs in his family), and that she would be left alone to fend for herself. Absolutely, security was at the very top of her reasons for scrimping and saving.

When she was dying of cancer, she literally wept in my arms over all the missed opportunities ... the things she had wanted to do and try and have but had not pursued, because she thought she'd need the money for her “old age.” To her, the only silver lining in the situation was that at least "the damned nursing homes wouldn't get to bleed [her] dry." She spent the last three months of her life visiting lawyers and setting up trusts to ensure that her "half" of the marital assets would be protected for her children and not get sucked away by nursing homes, should my Dad need one for an extended period of time. Which she clearly did not expect.

After my mother died, my siblings and I pooled the modest amount of money our mother left to each of us, and agreed it will be used for our father's care if he needs it. Not a dime of that money has been touched by any of us in five years. It's not a lot ... but it’s there, and when Dad's long-term policy runs out, we’ll take over from that fund. So not only are we not expecting, waiting or scheming for some kind of inheritance from my Dad, we're giving up the one we already got from our Mom. I'm pretty sure Mom would kick our butts if she knew.
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AlisonBoBalison -- A beautiful post, beautifully expressed. :-) I wish I could write as simply and powerfully as that! :-)
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PaulaK~You are absolutely right that what my mother's attorney did for her can't be done today.
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You all speak so eloquently - thank you.
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The Medicaid caseworker who is evaluating the application cannot give a hoot about morality. Income, assets, exempt, non-exempt, penalty, assessor value, Blue Book value....it's sheer numbers, documentation and timeframes and that is what counts.

I understand the ethical dilemma but it makes no difference in getting momma or daddy on Medicaid. You have to be a cold eyed realist to maximize the use of your & their tax dollars (which fund these programs). Personally I just don't see how as we boomers age and the tsunami of aged and unwell hits in about 15 years that the current system can provide skilled nursing care. One good thing about dealing with the Medicaid maze with our parents or with an somewhat older spouse, is that we are getting a glimpse into the future that we HAVE TO PLAN FOR. It's not going to be pretty either way but planning at least gives your choices.

Jinx - yeah, I'm with you. But I think of it as the "wealthy" rather than "rich", if you have to work for to make 6 figures and keep on working to pay and stay where you are then imho you are a "rich" middle class...very upper middle class but still just 1 or 2 major event(s) from not being able to maintain your lifestyle. It's the true wealthy (generationally wealthy) that needs to be taxed just as the middle class does. Their income is so shielded that they never really pay taxes.
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I think it is imparitive to ask for assistance of a financial planner early in life. My parents, both school teachers, did this and dad has left mom with a sizable estate due to good investing and his creative woodworking/furniture making. Her financial planner continues to assist me with the decisions regarding her money as she moves to assisted living due to dementia. Because of these wise choices, I too am planning for the future so that my girls hopefully will not have to agonize over my care.
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I had one more thought. The ways to shield money from Medicaid are intended mainly to protect assets for the well spouse, not to provide an inheritance for the kids. I see nothing even remotely immoral in ensuring that a widow or widower can live out his or her years in some comfort.

LTC insurance is quite expensive. I pay $2000 plus a year. You shouldn't get it unless you can easily carve that much money out of your income for the rest of your life. If you can't pay, you lose everything you have put into it. It also only covers a limited period - 3 to 5 years.
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So one family "scrimps and saves" so they can leave their children something when they die. The other spends their money as they go through life, giving their children pleasures and extras while they're young, and they can share in the experiences with them. What I can say is that it's not my job to pay for someone's long term care so they can leave their adult children an inheritance. If one's savings have been used to pay for long term care for self/spouse and/or medical care for one's self or spouse....you can spend down to the level that makes you financially eligible for public assistance with no penalty. Purchase long term care insurance? I can barely meet my monthly expenses, as is. And there are lots of loopholes with long term policies that allow them to not honor it when someone really needs and should be eligible for care. Hire a financial planner? I did. And my 403 Bs and 401ks took a major hit like most peoples' in a very volatile, unpredictable money market...that no one saw coming back when I first started a 401 k. I would have been better off sticking it in a savings account. At least I wouldn't have taken a loss!
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Thank you jfryhospice, you expressed my views in a much more eloquent manner than I have been able to. The provisions for the spouse retaining assets is also fine with me as mentioned by Jinx4740 in her most recent post. Prior to the five year look back I saw farmers and their wives sign their land over to their children to protect that asset and begin getting Medicaid immediately for their nursing home care. They felt fully justified because they had worked hard. They truly had worked hard but I don't think that justified not paying when they could afford to pay. Protecting assets for the spouse is legal, moral, ethical, allowed for in the medicaid system. Protecting assets for adult children to inherit - not so much. I'm going to try a new strategy. When I see the word Medicaid in the post, I'll move on to another post. That will prevent me from jumping on people who ask about protecting assets.
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I think we can do without judging whether or not anyone is immoral or deceitful. Every situation is different, if a lawyer can help that is a good thing, by the books. You are the best judge of your own self, no one else has a clue what or who you are or what you are going through. I say stop with this additional guilt and shaming, isn't there enough to work through as is?
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Great question & the answers are filed with revelations. No one made any bad choices? like "falling in love" with drunks & con artists, getting pregnant before marriage, choosing to live for the day & not prepare for the future, expecting tax paying workers to pay for their remaining days. These are all choices, we all make bad choices, but rather than expect others to be responsible (pay) for them, what has happened to personal independence & & responsibility? Social programs were intended to be a safety net, not a way of living. If we continue on this path, 80% or our residents will also be living off the government, like in socialist countries. And guess who pays for that?

We all make choices, it would be beneficial if good ones were encouraged rather than a live for yourself & do as you wish attitude.
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Every family in the world has its own unique habits and circumstances. But could it be possible that everyone of them is accountable to just one moral standard? Thou shall not steal?
In my case, our family (with an average income) lived within our means and managed to save a sufficient amount for a comfortable retirement - comfortable in the sense that we could keep our home and pay our bills - and perhaps take a modest trip now and then. I'm two years younger than my wife, and continued to work (at my own business) until age 70. Unfortunately my wife was diagnosed with dementia at 65. I cared for her at home as long as I was able. Now, at age 74, she is in her 20th month of skilled care, and our retirement assets are being consumed at a rapid rate. I had a 5 year window, but did not attempt to shelter assets, for myself or my children.
It's our life.
It's our problem.
It's our responsibility.
I have no idea whether our funds will last as long as she needs care, but I have no right to use other people's money and hide my own simply because I could have. If and when the time comes, I will liquidate our house and spend that money for her care as well.
I make no judgements about others, but I could not live with myself if I hid money and took from the public pot. I'd rather live in a tent. I will be her provider as long as I live.
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