After an extended stay in hospitals and nursing homes: when insurance runs out - what do you do?

-How do you protect your assets? Your home, your 401K, your pension? your bank account?



This happened to my dad who is 70. He has a 401K retirement but by law must start withdrawing from it. Should we take all money ( withdraw 100% and put it in his daughters separate bank account? He has 40 days of coverage remaining: at that time it will be family's responsibilty to cover him. H0e is a veteran from vietnam ( Army ). VA coverage is difficult to obtain. I am not hbere begging for money: I need advice and answers! I can email you more for info if needed.Well, AFTER you've had the problems, it's too darned late to protect your assets! You have to put your "asset protection" in place, BEFORE stuff starts going wrong!!



And seriously . . . most of the people who ask this on behalf of their elderly parents, are doing it because they want to inherit the money. They get greedy, want to impoverish mom and dad and put them on welfare to TAKE THEIR STUFF. Nice. (read the sarcasm) Then they get bent out of shape, because hey, I call a spade a spade.



Your dad's assets are there, to pay for his care, in his retirement. The money is there for HIM, HE earned it, HE saved it . . . it's not yours, and it's not your sister's. It's HIS.



Once he runs out of insurance (which really only happens with NURSING HOMES), then he starts paying for them out of his assets!!



If you're trying to take all his money, and then put him on welfare - Medicaid - this is Fraud, and isn't going to work. Medicaid is "on to" that. They have a five year lookback period, for asset transfers.



His assets must be spent down. If he's in a nursing home, he probably doesn't need that house any more, I'd sell that first. After he runs through that money, he can start going through his 401K.



It's too late to "protect his assets", which, btw, are HIS. . But you're, what, 40 or 50, so now is the time for YOU to sit down with an estate planner, and figure out how to protect YOUR assets. So YOUR kids can take all your stuff in your older years, and put YOU on welfare.At this point, it is now too late to protect his assets.



What you do to protect the assets is to buy long-term care insurance before (not after) the person needs to go to the hospital for an extended stay.



If you have not already bought the long-term care insurance, then it is too late now. You use all your assets to pay for the hospital, and then, after you use all your assets, you go on medicaid.
You can't take the money out and put it in your sister's name - you can't try to hide assets.

He needs to begin withdrawing it to cover his retirement. This is his retirement.

While he has assets the government won't pay. When his assets are gone, they will. Make sure he is in the best home he can be in and the government will continue paying for that facility.
Most people turn their retirement nest egg into an annuity at some point when they get really old. That way they can claim no assets and get government medicare or Medicaid or something. This is standard estate planning / retirement planning stuff. Call a will and trust lawyer in your area and go talk to him in person.
You have to pay for your nursing care. Your savings, your investments and your pension are for your use when you have expenses like nursing care or other medical to pay for. That is why you have these assets. Medicare pays for some limited nursing care following a hospital stay but does not pay for long term residential care in a home. You may have to sell your house to pay for care but that is what your assets are for, to use to take care of yourself.



You should get a long term care insurance policy and hopefully the waiting period is not too long before you need to use it for nursing home care.
Use this as a reason to get long term care insurance for yourself and your family.



If you put the money in his daughters bank account you will be guilty of Medicaid fraud, which can be punishable by jail time. You'll need to use his retirement to pay for his care. Cash, stocks, bonds, cash value life insurance over $1500 are all countable assets which he'll have to use. After he uses his assets he can go on Medicaid and the state will pay for his care, although they will take most of his Social Security.



A house is not countable but the state may place a lien on the house when he passes. A car, home furnishings, a wedding ring, some life insurance and some burial policies are not countable and won't be attached.