Your aging parent has more care needs than dinero. He or she is on the road to Medicaid. As the dollars shrink, mostly to cover eldercare, you can do some things to provide for your parent’s future.
Welcome to the world of the Medicaid spend-down. Each state sets its own rules for Medicaid eligibility and how people can spend their limited funds before they reach the asset limit–usually $2000.
My favorite spend-down strategy is prepaying funeral costs, probably because my family’s experience ended happily.
The story went like this: Daddy and Mother’s tiny retirement nest egg of $60,000 dwindled rapidly soon after they both moved to a Wisconsin nursing home. My sister Carol landed on a great idea. Having power of attorney, she set aside in a specific account, earmarked funds to pay all their funeral costs, including preparation of the body, minister’s and soloist’s fees, and other expenses related to the service.
In addition, the plan included monies for plots, burial stones, and even enough for a dinner for family and friends. Funds were set aside for our family’s out-of-state flights, hotel costs, and car rentals, too. When the time came for the funerals, we adult children didn’t worry about money.
What a blessing not to be stressed about finances! And later, after all the accounting, there was money left over–not much, but some.
It was a good way to spend down money before they converted to Medicaid funding.