How Can I Protect My Parent’s Assets If They Need to Be Admitted Into a Nursing Home for 24/7 Care?

Quick Answer

Options depend almost entirely on timing and on what your parent still has capacity to sign. Strategies can include correcting how assets are titled, using spousal protections when there is a spouse at home, setting up a Qualified Income Trust if income runs over Georgia’s cap, and documenting caregiver arrangements properly. What you should not do is start moving money before somebody looks at the whole picture.

Start with the two clocks

There are two clocks running and most families only hear the loud one.

The loud clock is money. Private pay invoices arrive monthly and the balance goes down. That one is stressful but it is also the more forgiving of the two, because money can often be worked with.

The quiet clock is capacity. If your parent still has the capacity to sign documents, a set of options exists. If capacity is lost, those options narrow sharply and your family may be looking at guardianship or conservatorship instead, which means going to court to get authority a document could have given you.

Now realize which clock actually decides your outcome. It is the quiet one.

What gets examined

When we sit down with an adult child in this situation, we are looking at a specific list.

How the home is titled and who lives in it, because the home is treated differently from other assets and is frequently not the automatic loss families assume. Whether there is a spouse still at home, because Georgia has protections meant to keep that spouse from being impoverished and they are routinely underused. What income looks like against the Georgia cap. What has been given away in the last five years, including small gifts that felt like nothing at the time. Whether existing powers of attorney are broad enough to actually do planning, which many are not.

That last one surprises people constantly. A power of attorney your parent signed years ago may not contain the authority needed to do the very thing you now need done.

The mistakes that do real damage

Adding a child to the deed or the bank account. This is the most common well intentioned move I see and it can create a penalty period, expose the asset to the child’s creditors and divorce, and cause a tax problem on top of it.

Selling the house because somebody at the facility suggested it.

Spending down to nothing on the assumption that being broke is the entry requirement. It is not.

Waiting for a crisis to become a catastrophe before making a phone call.

The Georgia piece

Georgia applies a five year look back to transfers, so gifts inside that window get reviewed and may create a penalty period, which is a stretch of time where Medicaid will not pay.

Georgia is an income cap state, so income over the limit requires a Qualified Income Trust. That is the Miller trust, functioning as a conduit for income.

Caregiver arrangements can matter when a family member has genuinely been providing care, but they have to be documented properly and in advance. Paying a daughter informally for two years and hoping it counts later is not a plan.

When to talk to somebody

Before you move a single dollar, and ideally while your parent can still sign.

What I will say is this. The adult children who call us during the hospital discharge week consistently have more available to them than the ones who call eight months into private pay. That is not about skill. It is about how many doors are still open.

A note on how to use this

Educational purposes only, and not legal advice. Everything here is fact specific to your parent’s assets, income, marital situation, and capacity, and those details change the answer completely. I am licensed only in Georgia and Michigan and can speak only to those two states. Rules and dollar figures change regularly.

Outside Georgia, take this as foundation and go find a wealth protection attorney in your jurisdiction.

Your next step

Schedule a complimentary 15 minute Strategy Session at 404-549-5001 before you move assets or sign anything.

If you are the adult child who suddenly has responsibility for all of this, ask about “Becoming the CEO of Your Parent’s Life.” Our weekly webinar runs every Thursday at 1pm.

Related questions

• How do I protect my resources and qualify for Medicaid?
• Can I be eligible for long-term care under Medicaid when I have assets over the limits?
• Should I add my child as the joint owner of my house?
• If I haven’t planned ahead and need long-term care assistance today, is it too late?

   

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!