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“But Mom Won’t Live to 100 – Or Will She?”

Quite often when explaining long term care planning to the family member of an aging senior, specifically when I mention the 5 year Medicaid look back, the person will tell me that “Mom won’t live that long”.  Of course, no one can predict the future with any certainty so, logically, that statement is opinion and not fact.  But, it reminds me of a client I first saw a few years ago. I now retell her story frequently.

Mary’s mom was already in a nursing facility when she came to see me.  Mom was in spend down mode, paying privately for nursing home care, at the rate of about $100,000 per year.  She had $1.2 million in assets and minimal Social Security of $500 per month.  Oh, and she was 95 years old.

Her situation was pretty simple and straight forward.  She didn’t have long term care insurance.  Her deceased husband wasn’t a veteran.  She didn’t have any disabled children or own a home.  I explained to Mary that Mom had two options, private pay and Medicaid, but all assets would need to be spent first before Medicaid eligibility could be an option, unless we did some very basic long term care planning.

I told Mary that we could move some assets to a trust.  “But what about the Medicaid penalty and look back period”, she asked.  I explained that Mom would need to private pay for her care for 5 years, approximately $500,000, before we could apply for Medicaid.  We discussed the likelihood of Mom living to 100.  I told Mary that while I agreed the odds were not good  she would have to evaluate that risk herself and decide if it was worthwhile to plan for that possibility.  She opted not to do the planning and thanked me.

Well, you know what happened, right? (Otherwise, I wouldn’t be telling you this story.)  Mom did live another 5 years and Mary came back to see me when she reached 100.  I’ll tell you all about that meeting in next week’s post.