Alzheimer's Disease - A Long Term Care Planning Lesson

Mom is in her late 40's and divorced.  She owns her own home worth approximately $250,000 but with a substantial mortgage with a balance of $150,000.  Probably describes a lot of people.  Except that Mom has Alzheimer’s.  While the disease mostly affects the elderly, early onset Alzheimer’s is not uncommon.  It is hereditary and can hit people in their 30’s.

 I received a call from Jane, her daughter.  Mom can’t work and has no income.  The home is a mess and falling into disrepair because she can no longer take care of it.  She is temporarily living with her father who is in his late 70’s.  He pays the mortgage, taxes and upkeep on her home, although he is getting on in years and his health is failing.  The family has no direction and is just living day by day with no idea when the nightmare will end.

 Jane asked if we could help save the home.  Could the home be transferred out of Mom’s name?  My answer, unfortunately, was no.  “How long ago was Mom diagnosed”, I asked.  Jane told me it was about 3 years ago.  Mom refused to consider moving and Jane and her grandfather have been supporting Mom to this point but now they have reached a point where that is no longer possible.

  So now the home is on the market.  But after closing costs and paying off the mortgage there isn’t much left.  She was also hoping to recoup for herself and her grandfather the money they spent supporting Mom.  Most importantly, there is the matter of providing care for Mom, hopefully in an assisted living facility at a cost of $4500 per month.  When Mom’s condition worsens the next step is a nursing home and that costs $9000 per month.

 I sympathized with her but didn’t have any magic solution.  She simply waited too long before making what no doubt are tough decisions.  So what should she have done?

 3 years ago when the diagnosis was made is when the family needed to act.  Selling the home and/or moving assets into a trust and out of Mom’s name would have made sense.  Because there is a 5 year lookback for Medicaid benefits the family would need to manage Mom’s care and costs during that time period.  But, managed correctly, they could have had assets left after 5 years, in trust, that could be used together with available government benefits to get the best care possible for Mom.  They would have had options.

Now, they are selling a home falling into disrepair, in a down market.  Not the best scenario for Mom who needs as much money as she can squeeze out of the sale to provide for her future care.  A lesson for us all.  If we delay making tough decisions they only get tougher.

 I felt the despair in Jane’s voice.  “How can our country let this happen?”, she asked.  I didn’t have an answer for that one either.