Being an Elder Care attorney for over fifteen years, I have seen so many people in anguish over caring for their aging parents. Many times, I have heard men and women say, “The pressure is killing me.” Most of the time, it is the women who are the caregivers in the family whether it is a spouse, father, mother, or the in-laws. Reflecting upon what these wonderful people are going through, and the overwhelming effects on their lives, I felt compelled to write this article.
One client, who recently moved her mother back to New Jersey from Florida after she fell in the bathtub, has been paying her mother’s bills. Another is dealing with the quick deterioration of both his parents. One has Dementia; the other has Alzheimer’s. His mother recently fell and broke her hip. No Power of Attorney or Will has been established.
On top of coming to terms with their parent’s deteriorating health conditions and going from living independently to needing complete total nursing care, many caregivers show signs of personal health symptoms like depression, anxiety, fatigue and financial burdens. Unfortunately, by the time they come to see me, their efforts and decisions in caring for Mom and Dad have actually made their parents’ situation worse, rather than better.
Some important facts need to be kept in mind prior to making any decisions. First, we have to understand that we are dealing with Mom and Dad’s money, not our own. When caring for your parents, you need to make sure you have proper documentation for how their money is being spent, especially when the state is providing financial assistance to care for Mom and Dad. You need to always ask yourself, “If I spend money on this, is there a genuine reason to spend this money?” If the purchase is legitimate, you must have a receipt. If Mom and Dad’s money is used for your own expenses, you can make your parents’ Medicaid ineligible; you can be called into account, and in some cases even prosecuted.
If you start paying for Mom’s expenses out of your own pocket, you are showing that you may be personally responsible for Mom’s financial obligations. Once you set a precedent of covering Mom’s expenses, you put yourself and your children’s financial well-being at risk. There are so many other options and programs available, only an expert, and particularly an Elder Care attorney, would be able to provide sound advice and direction to avoid financial disaster.
What about Medicaid? To qualify for Medicaid, a person can have no more than $2,000 in total assets. States are tightening the rules for Medicaid assistance. Medicaid looks at the last 5 years to see what assets were transferred, why and to whom. If, during this five-year look back period, Mom and Dad’s home is transferred into your name, you may end up disqualifying Mom and Dad for Medicaid. You cannot deliberately impoverish your parents to qualify for Medicaid.
Moreover, if you receive Mom and Dad’s real estate as a gift, the capital gains taxes you will incur are based upon your sale price, minus your parents’ purchase price. If your parents bought a house in 1960 for $20,000 and you take title to it and sell it five years from now for $400,000, you will pay capital gains tax on $380,000. There is a better way to handle this issue.
I know most people have a real aversion to hiring an attorney. I am here to tell you that there are good attorneys out there who will help you make the best decisions and provide good options in caring for your parents. An Elder Care attorney can make recommendations on housing placements based upon the needs, personality and wants of their clients and their parents. He or she can draw up the necessary legal documents and provide guidance to ensure that your parents are getting their needs met and you can continue to live your own life. There is no need to feel overwhelmed and alone. There is no need to make a wrong decision that ends up bankrupting your family and with your parents not getting the right care they need.