Monday, February 04, 2013

Taking Risks

I've never thought of myself as much of a risk taker.  I'm pretty practical and tend to take the safest route.  But as I thought about it, I have seen two huge risks I've taken in my life that paid off very well: my choice to become an actor and my choice to essentially leave the LDS Church to have a life with Jonah.  Both of those choices have brought me immeasurable happiness.  That isn't to say there haven't been challenges associated with either, but I certainly do not regret either one, and certainly neither one was necessarily a "safe" choice.

I am faced with a potentially risky prospect, although I feel it is the right thing to do.  As you well, know, Mom is now in an assisted living facility, and of course, that is very expensive and will eat through Mom's assets relatively quickly.

A family advocate who deals with Medicaid issues faced by families going through what mine is going through and who was recommended to us by the assisted living facility where Mom is put us in touch with an attorney who specializes in financial planning for the elderly and who also has a great knowledge about Medicaid, how it works, and its pitfalls.  He and the family advocate both said that there is a way to save some of Mom's assets from being completely spent down before Medicaid will take care of Mom's expenses.

The attorney also said that even once one qualifies for Medicaid, there are certain things that neither Medicare nor Medicaid will cover so it's good to have a safety net of assets that Medicaid can't touch.  Essentially the plan the attorney proposes is setting up a living trust of which one of Mom's kids would be the trustee and which most of Mom's assets would be put into.  This would make what were once Mom's assets technically become someone else's even though, in truth, they are still really hers.  This is kind of a legal loophole one can use to avoid losing all of Mom's assets before the state will help out.

However, when an applicant applies for Medicaid, the state will look back and see if such transactions have occurred and will penalize the applicant for doing so, preventing them for applying for Medicaid for a certain period of time.

Our rough estimate is that if we were to go forward with this plan, Mom would be unable to qualify for Medicaid for nearly four years, during which time we would still use her assets to pay for her care, but then once she qualifies for Medicaid we could still hang on to whatever assets are remaining to help pay for the things Medicaid and Medicare don't cover and could even perhaps leave some remaining for funeral and death expenses and even inheritance (although inheritance is not our goal; our goal is to help care for Mom).

The legal fees for implementing this plan run anywhere from $5000 to $8000 depending on the complexity of the plan, and of course, when you're already stressed and worried about having enough money to care for your mom, that seems like a lot; but it's also important to look at the money as an investment that you will theoretically gain back.

The big risk is what happens if we don't sell Mom's house because that is crucial, as the bulk of the money we would use to pay for Mom's care during the penalty period will come from that, and if we don't sell it, how will we pay for her care once the money we have runs out.

Now Mom's house is a pretty good house in a decent neighborhood and should be fairly simple to sell, but in real estate, who knows?

It is comforting to know that the law firm we're dealing with has a great reputation for honesty and trustworthiness.  It is also comforting to know that an independent lawyer friend who helped Mom in the past when my dad died recommended we do this.  And it is very, very comforting to know that the attorney we are dealing with has had a 100% success rate in preserving some of the assets of the elderly in similar situations as my mom except in cases where the person died during the penalty period, and I actually anticipate Mom will live a while, and even if she doesn't, we would burn through her assets anyway, so really, what do we have to lose.

I am also very comforted by the attorney himself.  In my conversations with him, he is both confident and knowledgeable, but more importantly, I genuinely think he cares about the elderly and their families and how situations like this affect them.  He got into this branch of law originally because of the struggles his own family faced when his grandmother suffered a stroke.

My brother and I hold power of attorney for Mom.  Until just recently, my brother was trustee over her trust, which theoretically protects her assets after she dies (which is different from the trust this lawyer wants to help us create, which theoretically will protect some of her assets while she's still living).  My brother chose to abdicate his duties as trustee because the financial responsibilities have caused him great stress and have been affecting his health in negative ways.  I am now the trustee and am now largely responsible for Mom's bills and financial matters.

After having a long conversation with this attorney, I am convinced that this plan can help save some of Mom's assets and will help her and us financially in the future.  I have talked to my family about this.  My brother, surprisingly (because I thought he would be the most resistant), said if I felt it was a good idea and because our family friend recommended it as well, he supports me in my endeavors (I think more than anything, he's just glad I'm in charge of this stuff and not him).

But, good idea or not, I am scared to make this decision because there are potential risks, and I certainly don't want to do anything to put Mom at even greater risk than she already is; and if things do fall apart for some reason, it will be on my head, and who wants that?

As I was stressing about whether to actually go through with this prospect, I was in a store with Jonah yesterday and there was one of those motivational signs that said simply, "What would you attempt to do if you knew you could not fail?"  I thought to myself, "I would save as much of what my mom worked her whole life for as I could."  Simple as that.

Of course, I do not know if this plan will succeed or not.  If everything works out the way it should, it will.  But things can go wrong.  Like I said, I think of myself as someone who doesn't take risks very often; who would rather play it safe than gamble.  So I'm scared even though I think this is the right way to go.  And I guess it's okay to be scared.  But as Jonah often says, "You have to live life by faith, not fear."

I hope this is the right decision.  I believe it is.  Nothing's ever 100% guaranteed.  I can't worry too much about "what if?"  I just have to believe that things will work out for the best.  God has always looked out for my family, and I believe he always will.  We will certainly face challenges, but I believe we can succeed.  I hope and pray so anyway.

1 comment:

LCannon said...

It won't fall just on your head. If it does, I for one am willing to accept equal responsibility. Wish her costume jewelry was of a higher quality than I think it is. It looks very "child's play dress-up" to me. And so much of it has fallen apart throughout the years. I doubt even DI would want them.