As an estate planning attorney, you often feel like a broken record insisting on the importance of advance planning and foresight but then every once in a while, a case comes through the door that makes you feel like you should insist yet more. The following is one of those cases.
Mrs. Johnson [name changed for privacy reasons] arrived at our office with her son. Her husband, who was in rehabilitation recovering from a stroke, suffered from multiple ailments and required long-term nursing home care. While Mr. Johnson also had children of his own, they were not much involved in his life and so Mrs. Johnson and her son—of which Mr. Johnson was not the father—were all he had. The burden of care had become too much for them, though.
Mrs. Johnson had located an appropriate nursing home for her husband but had been informed that he could not be admitted for financial reasons. She had considered at-home hospice care but because it would not be full time and because her son worked, it would still be more than she could manage. What is more, Mrs. Johnson worried about the toll caretaking would inflict on her own health.
Together, Mr. & Mrs. Johnson had about $100k in accounts, their marital home, and a car. Each earned about $1,500 a month and together they lived a good life. If Mr. Johnson was forced to go to a nursing home, however, Mrs. Johnson would barely be able to scrape by. The decision she faced was agonizing and she did not know what to do. Neither nursing home nor hospice care presented a viable solution and yet something had to be done. Worse, Mrs. Johnson only had two days to act.
Working to get Medicaid to cover Mr. Johnson’s long-term nursing home care needs was the obvious fix but there was a sticking point. In addition to the assets just mentioned, Mr. Johnson had an account with $20,000 that was in his name alone. Since Medicaid will only allow a nursing home applicant to have $2,000 in assets, he was over-resourced and would not qualify.
In meeting with Mrs. Johnson and her son, we strategized a solution. In order to get her husband admitted to the nursing home, Mrs. Johnson would need to file for a conservatorship with the court such that she might gain access to Mr. Johnson’s account and spend down his assets. An Alabama Family Trust was used to do so and, ultimately, we were able to get Mr. Johnson admitted to the home and properly cared for.
The fee Mrs. Johnson needed to pay to gain the conservatorship was $3,000—two months of her personal income. Had Mr. Johnson filed a financial power of attorney long before any of this had happened, his wife would have need not payed anything to gain access to his account bring his assets under the threshold. Doing so would have taken no time and would have saved this couple significant money and tremendous stress.
To draft your own financial power of attorney or to address any other estate planning need, do not hesitate to contact Miller Estate and Elder Law. Our phone number is 256-472-1900 and we can also be reached via the contact form on our website.