Nancy Watson feels worn out. Four years ago her father died and for the past three years she has been caring for her aging mother.
At first, it was little things…grocery shopping, trips to the doctor, help with her mother’s medication, and things like that. But as her mom’s health deteriorated, Nancy’s burden has increased. The last six months have been very difficult. That’s because Nancy had to move her mom to a nursing home. Mom couldn’t live at home any more.
Nancy thought her job would be easier once the nursing home staff took over, but it hasn’t turned out that way. As the oldest daughter, Nancy still feels responsible, even though technically, someone else is now responsible for Mom’s care. Nancy feels like she has to be there. So she visits her mom six days a week.
Nancy is running herself ragged and Mom is running out of money. Mom has about $50,000 left, and at $7,500 per month for the nursing home, Nancy knows Mom’s money won’t last long. When the money runs out, who will be there to pay for Mom’s nursing home? Sure, Nancy has heard Medi-Cal will cover the nursing home, but she’s also heard Medi-Cal won’t cover everything. What then?
Nancy was quite distraught when she came into my office. She wanted to know if there was anything she could do to preserve Mom’s assets. I told her there were steps that she could take.
Given Nancy’s high degree of involvement, I suggested that a personal care contract should be considered. I explained that Nancy and her mom could enter into a formal agreement where Nancy becomes Mom’s care manager. Even though Mom is in the nursing home, if done properly, Mom can pay Nancy for her care management services.
For example, if Nancy spends approximately 1-1/2 hours per day caring for Mom, that’s nine hours per week (i.e. six days per week times 1.5 hours per visit). Mom can agree to pay Nancy $10 per hour, or $90 per week, for her services.
In and of itself, that wouldn’t be very exciting. But consider that Mom and Nancy can enter into a Lifetime Care Contract and it gets interesting. Mom can agree to have Nancy act as her care manager for as long as Mom lives. In other words, Mom can pay Nancy $4,320 per year (i.e. $360 per month times 12 months) and Mom can make this payment in a lump sum for Mom’s life expectancy. So if Mom has a life expectancy of 11 years, she can pay Nancy $47,520 (i.e. $4,320 per year times 11 years) and she can pay the $47,520 up front in one lump sum.
This will allow Nancy to provide Mom the care she needs and still allow Mom to qualify for Medi-Cal.
I explained to Nancy that I had given her the “short version” and that this type of planning must be handled in a very specific manner, but when done properly, it can be used to solve Nancy’s dilemma.
Nancy was relieved. I had shown her how she could make a smooth transition from caregiver to care advocate.
This information is for general informational purposes only and does not constitute legal advice.
ABOUT THE Litherland, Kennedy & Associates, APC, Attorneys at Law
Roy W. Litherland is an attorney whose practice emphasizes elder law and estate planning. Roy has practiced law in the greater Bay Area for the last 37 years and is certified as a legal specialist in Estate Planning, Trust and Probate Law by the California State Bar Board of Legal Specialization. In addition to his extensive legal background, Roy was also previously licensed as a Certified Public Accountant. Although Roy has an extensive background in accounting, he retired his license to practice as a CPA to devote his time and energy entirely to the practice of law, specializing in estate planning, trusts, Medi-Cal planning, and probate. Roy is a noted speaker on living trusts, Medi-Cal Planning, and estate planning. He is a member and designated Fellow of the American Academy of Estate Planning Attorneys, an organization that fosters excellence in estate planning.
Lois Tager, Director of Geriatric Care Management, holds a Masters in Education, specializing in counseling and psychotherapy from Providence College, a Bachelor of Science in Education from Boston University and is a Certified Senior Advisor and Geriatric Care Manager. Lois worked in the Bay Area as an instructor in healthcare at West Valley College and maintained a private practice in counseling for many years. Lois has worked with the Alzheimer’s Association for the past 12 years as a facilitator for caregiver groups. She published “Sundown Syndrome: A Primer” in the CSA Journal of the Society of Certified Senior Advisors, CSA Journal 46, 2010. She authored a column “Ask Lois” for the Alzheimer’s Association Monterey County Newsletter and wrote numerous articles. She is a former columnist for AOL’s Campbell Patch, Senior Corner, an on-line news column.
The Litherland, Kennedy & Associates, APC, Attorneys at Law is a member of the National Academy of Elder Law Attorneys and the California Advocates for Nursing Home Reform.