How Innovative Medicaid Planning Helped Save the Relationship of Two Sisters

by | May 31, 2022 | Medicaid/Medicare, Nursing Home

This is the real-life story of two sisters, an annuity, nursing home costs, and why Medicaid Planning matters.

Mom did not have much, but she owned her home, had a steady retirement income, and had purchased two annuities. Each in the amount of $50,000.

Each daughter was named the beneficiary of “their” annuity and would receive $50,000 from the annuity when their mother passed away.

The older daughter fell on hard times and asked her mother if she could cash in the $50,000 annuity. Mom agreed and the older daughter received her $50,000 “inheritance.”

Not needing her money, the younger daughter left her annuity in place as Mom had intended.

Mom suffered a stroke several years later, which forced her into a nursing home. She privately paid for the nursing home costs until she had nothing left but the home and the younger daughter’s $50,000 annuity.

But the annuity didn’t truly belong to the daughter. Mom was listed as the owner since she was still alive. The annuity would have to be spent before Mom could apply for Medicaid. And this meant the younger daughter would not receive her inheritance.

Of course, this was very upsetting to the younger daughter. She was the one who hadn’t requested her money early. She was the one following Mom’s original plan for the money to pass upon her death. And yet, she was the one “being punished” financially by her Mom’s stay in the nursing home.

Medicaid Planning Provides A Resolution

One of our attorneys sat down with the sisters for several hours listening to their story and devising a plan. In the end, we were able to develop a strategy that would allow an immediate transfer of the house to the daughter (thereby equalizing the daughters’ inheritances) while qualifying Mom for Medicaid several months later.

The mother continued to get the care she needed as she aged, and the daughters got a resolution to a very sticky situation. It was a very satisfying experience for our attorney and the two sisters!

We work with families every day to find solutions to the challenges of estate planning — complicated family circumstances, business and farm succession planning, and paying for a nursing home. It is our greatest pleasure when we can help families figure out legal solutions for complicated problems.

If You Need Help, What Should You Do Next?

If you want to learn more about planning for exorbitant nursing home costs, check out the following resources:

  1. Download a copy of our Medicaid FAQ (that ran in a local publication) to learn more about paying for nursing care, qualifying for Medicaid, etc.
  2. Sign up for our Medicaid Planning course. This series of emails will teach you the basics about planning for Medicaid and applying for the benefit, plus provide you with tangible steps to get started.
  3. Attend a free workshop to learn more about effective planning at every stage of life. Many of our workshops address effective planning across the lifespan, while some focus on the years when people begin to face the challenges of aging. Choose the one that’s best for you, or attend all of them! Call 217-726-9200 to RSVP and save yourself a spot.
  4. If you need help right away, just give us a call at 217-726-9200. We understand that many cases like these are urgent. One of our Elder Care Advisors will be more than happy to discuss your situation and what immediate actions should be taken.