I would like to put one of my children in charge of his care, but I don’t think any of the children will be able to care for him in their own homes. They are all busy with their own lives.
– Margie S., Hendersonville
Answer: It is not uncommon for the caregiver spouse to die first, so you are right to consider the possibility, though hopefully that will not be the case for you.
It is so important — and so difficult — to take care of yourself when you are looking after a loved one at home. If you make appropriate arrangements for your husband now, that will at least be one less thing to worry about.
You should begin by making sure that your husband’s Power of Attorney documents are up to date. I assume they name you as the primary decision-maker for your husband, and you may have the authority to designate someone else to serve in your place.
It is best if there is a succession of persons named to make health care and financial decisions for him, and hopefully he named the child(ren) you now think would be the best to take care of him if you are gone. If they are not named in these documents and you do not have the power to name alternates for him, then your attorney and his physician will need to consider whether he has the capacity to sign updated documents.
If not, it may be necessary to establish a guardianship with the court, so that upon your death, a successor would be appointed right away.
You should make sure that your husband is not the direct beneficiary of assets either through your will or the beneficiary designations of particular accounts (such as IRAs, life insurance, annuities and brokerage accounts). You should establish a trust for your husband under your will and make sure that this testamentary trust is designated as beneficiary of your accounts.
To the extent possible, you should make sure that your husband is no longer the owner of assets other than a checking account into which his Social Security and pension are deposited. I would advise changing ownership of the house and all other assets to your name only.
The only asset that would be required to remain in your husband’s name is an IRA or 401k owned by him, as these cannot be transferred to a spouse. The accounts can be liquidated (and taxes paid) and then transferred to you, but you would need to assess the tax cost of doing so.
If you are the owner of all assets other than your husband’s tax deferred accounts, then your will should instruct that all assets be paid over to your child as Trustee for your husband. Your child would have the discretion to decide how and when to distribute funds to or for the benefit of your husband.
Because the trust is discretionary, it is exempt from Medicaid. If your husband’s health care agent determined, upon your death, that he needed care in a skilled nursing facility, then the trust could be used to pay the $8,000 per month private pay rate or the trust could be preserved, and Medicaid could pay for the facility.
The trust could be used to pay for things Medicaid wouldn’t cover, such as companion care, geriatric case management, the cost differential for a private room, entertainment, family member travel expenses to visit with your husband, etc.
Upon your husband’s death, the trust assets would pass to those family members you may designate without being subject to the Medicaid recovery claim that would be made against his estate.
Setting up the proper estate plan for your husband will ensure that the right people have the authority to make decisions for him and that they have the maximum flexibility for deciding how to finance the cost of his care.
To explore the options unique to your situation, I recommend consulting with a qualified elder law attorney. He or she can answer your specific questions and help determine the appropriate plan for your family.
---Attorney Caroline Knox