Caregiver Tip of the Month
— Gifts from a Senior to His or Her Children —
Situation. My Dad passed away suddenly three weeks ago and I'm now looking for living options for my 86-year-old mother. As one option may be assisted living, I was talking to someone at work who mentioned that there is a legal amount of money that can be given to a relative (daughter) each year as a gift. I hate to see my Dad's hard-earned money go down the drain so quickly. I'd like to be able to put that portion away for my Mom and use it when the time comes to pay for her care. Is this a possibility?
Recommendation. The maximum amount anyone is allowed to give to another person without incurring Federal gift tax is $12,000 (2006 amount) per year per recipient. There is no limit on the number of these gifts one person can make to different people. For gifts that do not exceed the annual gift tax limit, the donor is not required to file a gift tax return, nor pay any taxes. And, the person who receives the gift does not have to pay any gift tax because of it.
While assisted living is the preferred option for people who can afford it out of their own pockets (neither Medicare nor Medicaid pay for it), the fact is that about 10% of assisted living residents eventually need to move into a nursing home to receive more extensive care as their health declines. To learn more about paying for assisted living, take a look at our article, Can You Afford Long Term Care?
For people who must move into a nursing home, the rules regarding gifts changed on February 8, 2006. Before then, people protected their heirs by transferring ownership of their assets while they were still relatively healthy. Then, if they lived another 3 to 5 years (the maximum waiting or "look back" period) before their health declined and they had to move into a nursing home, it was easy to qualify for Medicaid. And, because they no longer owned any substantial assets, Medicaid paid their nursing home bills.
Under the new law, the waiting period can run for up to 5 years, and it doesn't begin until you move into a nursing home and apply for Medicaid. That is, depending on the value of assets that you transfer, you will have to find some other way to pay your nursing home bills for up to 5 years. Medicaid won't start to pay until your waiting period has expired. (For more information about the new law, click on Medicaid Planning.)
Because the new law is so complex, and is filled with so many potholes, talk with an attorney who specializes in elder law BEFORE you transfer any assets or purchase an annuity, even if you have already completed the paperwork. And, don't take the word of any insurance agent who is trying to sell you an annuity to protect your assets. It won't work under the new law.
To find an elder law attorney, check the yellow pages in your local telephone directory, or go to the National Academy of Elder Law Attorneys' website. On their home page for the public, you'll find a link in the upper left corner (just below their logo) that will help you locate an elder law attorney.
He or she will probably recommend that, instead of transferring money to you now, your mother make the necessary legal arrangements to assure that, when the time comes, you can act on her behalf both financially and health-wise. In other words, has your mother appointed someone to take care of business and make health care decisions in case of temporary or permanent disability? Has she made clear her wishes for end-of-life care?
These are some of the documents your mother should have prepared if she hasn't already done so:
Living Wills and Powers of Attorney for Health Care are often referred to as advance directives for health care.
Finally, we suggest that you review our article, Elder Care 101 - 1st Steps. It is intended as a primer – a source of both information and comfort. Whatever your present circumstances may be, the article will help you get started. On other pages in our website, Aging Parents and Elder Care, you'll find a number of checklists to help you with more detailed guidance – and to help you feel more confident that you won't forget something important.
Our visitors ask ...
Q. My sister is 76 years old. Her hearing aids went out about 4 months ago (both at the same time). She doesn't have the money to buy new ones. She has had these for 5 years. They are done for according to a doctor we took her to. She paid $4,000 for them originally and does not have the money to replace them. Do you know of any aid that we can explore to get her new hearing aids? We will contribute a part but cannot afford to pay it all.
A. We have two suggestions:
1. Benefits CheckUp. Millions of older adults are eligible for federal and state benefits, but not receiving them, including assistance to pay Part B and Part D premiums for Medicare benefits. This is unfortunate because these programs can help with housing, meals, transportation, health care, prescription drug costs, legal services and utility bills, just to name a few.
Benefits CheckUp is a service of the National Council on the Aging, a non-profit organization. It helps older adults quickly and easily find out which benefits they qualify for, and how to get them (many are available regardless of income). This is a free service and is completely confidential. It does not require your name, address, phone number, Social Security number, or any other information that could be used to identify you.
Simply complete the online questionnaire. In a few minutes, you'll have a list of programs for which you or your loved one most likely qualifies, including phone numbers and addresses. It also includes step-by-step instructions on how to apply for the benefits. To visit their website, click on Benefits CheckUp.
2. Eldercare Locator. Developed by the U.S. Administration on Aging, this service helps older people and their caregivers find state and local support services that allow them to live independently and safely in their homes and communities for as long as possible. Look for the resources you need by following the directions on their website, Eldercare Locator. Or, call their toll-free telephone number 1-800-677-1116, between 9 am and 8 pm weekdays, Eastern Time.
Daily Living Solutions
— products for seniors —
As we grow older, it often becomes difficult to use many everyday products because of arthritis and other conditions. If you or a loved one needs a little help – or a lot – we've selected a group of practical and affordable solutions from our affiliated merchants to help overcome those limitations.
Whether you are looking for yourself, or to help an elderly senior continue living in their own home, you'll find a wide variety of supplies and accessories – raised toilet seats, safety rails, incontinence supplies, large-handle eating utensils, pain relief, diabetic supplies, pill splitters and crushers, big-button telephones, canes, walkers, rollators, wheelchairs – and much more.
Everything is sorted into convenient categories in our Solutions for Seniors section.
Caregiving – Finding the money for care at home
A variety of resources can help pay for care at home. We discuss these resources in some detail in our article 12 tips to help you find money (and free resources) for care at home.
Caregiver Tip #2
— Good News! (for people born after March 1, 1941) —
May 15th was NOT your loved one's deadline for enrolling in Medicare's new prescription drug plan in order to avoid paying penalties for the rest of their life ... IF they were born after March 1, 1941.
Instead, they can apply for the new Part D prescription drug benefit at any time beginning 3 months before the month of their 65th birthday, or they can delay their decision for up to 3 months after the month of their 65th birthday.
Thus, if they were born on any day in March 1941, their deadline for enrolling is June 30, 2006. If they were born later in 1941, that deadline moves to a later date. For example, if their 65th birthday is August 20th, they can apply for Part D at any time from May 1st to November 30th without any penalty.
For more information, visit our page Medicare's new Prescription Drugs Benefit.
Our visitors ask ...
Q. My father was transferred from a hospital to a skilled nursing facility for rehab after surgery. Even though this nursing home was his first choice, do we have any recourse if we want to move him to another nursing home? Would it affect his insurance coverage?
A. If your father moves to another skilled nursing facility, Medicare won't cover him there, even if the second one offers him a better chance for full recovery. Instead, he will have to pay the entire cost of his stay in the second facility out of his own pocket. This is true regardless of whether he is covered under the original Medicare program, one of Medicare's newer Medicare+Choice insurance arrangements, or Medicare Supplement insurance.
And, if he would require medical transportation (a wheelchair van or an ambulance) to move from one facility to another, he would also have to pay the entire cost of that transportation out of his own pocket. Medicare only pays for transportation in cases of emergency; most facility transfers don't count as emergencies.
Recommended Reading and Videos
Many excellent books and videos can help guide you through the caregiving process. For our recommendations, including a brief description of each one, click here.
For more helpful information from our website, click here. To see previous issues of this newsletter, click on Archives.
Aging Solutions is a free service of:
Solutions for Seniors, Inc.
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FOSTER CITY, CA 94404
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