Lately we have had some major issues with nursing home social workers, senior center volunteers and estate lawyers giving people bad information on Medicaid qualifications.
We hear this story all the time. A person enters a nursing home and the family realizes that they probably aren’t coming home. They meet with a social worker, a volunteer or a lawyer that tells them that they have to spend all their money down to $2000.00 before Medicaid will take over payment for the nursing home. They also tell them they have to cash in whatever life insurance they have and use that to pay the nursing home too. Then when the death occurs the family has no money left to even have a simple cremation and a memorial service.
Folks, this information is just not true. There are multiple different ways for families to prefund funerals that are completely within Medicaid guidelines and are considered legitimate spend down options. Myself and my wife, Jodi, have been doing this type of thing for over 25 years. We know nearly every nuance of every law and regulation that governs these situations. We are here to help people get qualified and get the assistance they need from the government without going broke in the process. We know that laws can be different in different states but much of what happens is very universal.
Here are just a few rules that apply.
Pre-paid funerals plans are not considered an asset when applying for Medicaid. In Michigan the upper limit allowable is a little over $11,000.00. These prepaid funerals can be purchased at any time, even after the person has entered the nursing home.
Term Life Insurance Policies have no cash value and are not considered assets. So if you have a term policy in place you can continue to make the payments.
Whole Life Insurance policies have cash value. If the cash value (not the face value) is more than $2500.00 you can borrow against the policy to bring the cash value down, to say $1000.00, and then use the borrowed money to purchase a pre-paid funeral plan from the funeral home. The same is true if you do decide to cash in the policy.
There are also many other options available and ways to divide assets up between family members and spouses that can keep the assets in the family instead of using it all at the nursing home.
Please remember this; Social Workers come and go all the time at nursing homes and government agencies. They are usually overworked and underpaid. They are taught some basic rules and given a huge manual that they never really read. They’re good people but they are not experts. They also are looking out for the nursing home or the government agency and it’s not in their best interest to help the family save money.
Not all lawyers are created equally. Many folks rely on a general attorney or estate planner. These folks know about wills and trusts but don’t have to deal with Medicaid rules the way the funeral homes have to everyday. Just because they are a lawyer doesn’t mean they are a specialist in eldercare issues. You wouldn’t go to your family doctor to do a hip replacement would you?
Jodi Clock, my wife, has written a book called “Navigating the Eldercare Journey – Without Going Broke”. It’s in its final edits and is due to be published this fall. It follows the story of “Russ & Yvonne” as they age through their 70’s and 80’s, have health issues, blended family challenges, enter a nursing home, qualify for Medicaid, have a funeral and all sorts of other challenges in-between. Each chapter will have a story section and then practical advice for how to handle similar situations.
Jodi has been in the funeral pre-arrangement business for 25 years. She has worked for Forethought Life Insurance, Fortis, and NGL. She managed the pre-need department for all the Michigan Lowen Funeral Homes and has personally met with several thousand families to plan and prefund their funerals. She writes a monthly column in the Shoreline Magazine and is a member of the Senior Marketing Group in Muskegon. Her book is sure to become a “must have” source of information for anyone going through this journey.
If you have questions please give us a call.
I’m Dale Clock. Thanks for listening.
Dale-Time 