Elder Assets House Co-op Apartment Illiquid Investments | Elderly Seniors Selling Downsize House

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Points 11 through 15

Don’t lock up your money. An illiquid investment may not be a prudent choice, even if the return seems attractive. For example, many banks and financial institutions try to sell their customers annuities, which may pay a higher interest rate than savings accounts or CD’s, but which also tie up your money for several years by imposing significant penalties for early withdrawal. These penalties make it more costly to implement a Medicaid plan, since the annuity usually must be liquidated and the proceeds transferred to another person or to a trust.

Think about the house. While it may be emotionally difficult to consider selling the family home, oftentimes it is a prudent choice. The home may be expensive to maintain or in need of repairs, it’s probably larger than needed now that the kids are gone, and perhaps the stairs are becoming difficult to navigate. It may make a lot of sense to sell the house, and downsize. At the same time, an Elder Law plan can be implemented to protect the proceeds of sale, and provide a more comfortable lifestyle.

If you own a co-op, you’ll likely need professional help. Effective Elder Law planning often involves the transfer of assets to a protective trust. In the case of a co-op apartment, however, you cannot make a decision to act on your own, because the co-op board’s approval of any transfer of ownership will be necessary. Unless your co-op has already decided to permit ownership by trusts, you may be confronted with a negative response. An experienced Elder Law firm has dealt with this problem before, and knows how to gain approval in most situations.

Think about hiring your kids. With a Caregiver Agreement, you can hire one or more of your children to provide assistance or companionship. While the idea of paying a child to care for a parent may seem repugnant at first blush, a Caregiver Agreement can provide significant advantages. A caregiver child may have to give up a job or reduce hours at work in order to care for Mom or Dad. He or she may resent siblings who are not doing “their fair share,” and the siblings may feel guilty about not helping out. These problems might be avoided if the caregiver child is receiving compensation. In addition, payment under the Caregiver Agreement may be an excellent way of reducing Mom or Dad’s assets in order to qualify for Medicaid.

Long-term care insurance doesn’t solve the problem in many cases. For some, a LTCi policy makes sense, but for many it just doesn’t. Often the coverage is too low, and the benefit period too short, to pay the cost of care, and then you’re forced to deplete your assets anyway. Elder Law planning produces a better and more cost-efficient result in many cases.