Last week we were discussing Mary’s dilemma. Her husband, George, has Alzheimer’s Disease and is going to need some care at home. Mary is concerned that soon he will need nursing home level care and she wants to preserve their primary home and their second home.
The problem is that George does not have long term care insurance so will have to privately pay for care until Medicaid eligibility. Mary can keep the primary home and $119,220 in assets but everything else needs to be spent down before Medicaid will cover his care. She can’t simply take George’s name off the deed to their shore home.
So, what are their options? It may still be possible to transfer the second home to a trust and try to get through the 5 year look back. George doesn’t yet need nursing home level care and it may be possible to pay for the care he needs for 5 years if his decline in health is slow rather than rapid. This would mean spending other savings during that time frame and if they can’t quite make it, maybe a family member can help pay for care. If not, Mary can always reluctantly sell the second home if there is no other option.
Another option is to sell both homes and buy one primary residence with the proceeds from both sales. While this doesn’t accomplish what Mary really wants – to keep the shore home in the family – it does help preserve the money for her needs and increases the amount that will be able to be passed on to her family after she passes away. If a family member can purchase it, or take a mortgage to do so, then it can stay in the family.
Where does Mary go from here? I told her that a transfer to trust is definitely worth the effort since we don’t know how George’s illness will progress. But, the lesson here is an important one. Mary should have called us much earlier, when both George and Mary were still healthy, not after George’s diagnosis. It would have made it much easier to get through Medicaid’s 5 year look back and Mary would have been assured of keeping the shore home that she and her family have enjoyed for years.
As it stands now, we will set up the trust, make the transfer and she’ll cross her fingers in the hope that she didn’t make the decision too late.