When your parent won't do Estate Planning

Dear Len & Rosie,

My mother is very young, only 60 years old, but she has a degenerative brain disorder that has caused early dementia. She lives in southern California, so from long distance, we have tried to get her to agree to having help in her home. She is resistant to this idea. She no longer sees her neurologist because nothing can be done for her. Right now, she doesn’t even have a doctor. My sister does have an advance health care directive our mother signed a few years ago.  How can we can get her the help she needs either in her own home full time or in a retirement home?

Karen

Dear Karen,

There’s not a lot that you can for your mother against her will. Even if her advance health care directive gives your sister immediate authority over medical decisions, your mother has the right to make her own choices, even bad choices, concerning her medical treatment. Your sister can take over if and when your mother’s mental condition deteriorates to the point where she can no longer care for herself. But until that happens, your mother remains in control of her own life and she has the right to make unwise decisions.

Many people suffering from early dementia or Alzheimer’s disease confront their condition only reluctantly, when it becomes obvious to all concerned that they need day-to-day help. Since your mother legally still has mental capacity, you cannot just barge in and take over. You need to calmly persuade her that she needs help, and that she will have more independence in her life if she accepts help now, rather than stubbornly living alone until injury or self-neglect forces her to leave her home.

If your mother is willing to help you help herself, she should update her estate planning documents by giving you or your sister a durable general power of attorney in addition to her advance health care directive. If she has a revocable trust, it is probably a good idea for her to resign as trustee and let her children manage it. If she does not have a trust, she ought to create one now.

Your mother should also consider Medi-Cal planning. If her condition is progressive, there may come a time when your mother is physically and mentally incapable of living in her own home, or even in an assisted living facility. It is a difficult issue to confront, but your mother may eventually need nursing home care. By acting now, she can help shelter her assets from expensive nursing home bills. Remember that the goal here is not for you to take over your mother’s finances and ship her off to a nursing home for her own good. But you do need the tools to provide care for your mother to the extent that she needs it.

If she refuses assistance, then you may have to wait until she is clearly incapacitated. At that time, you can act on her behalf if you have a durable power of attorney. If you don’t, you may have to file for a conservatorship over your mother, which will get the court involved making things more complicated to deal with than if your mother has an estate plan.

Len & Rosie

Medical Estate Recovery

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Dear Len & Rosie,

My friend’s husband died two years ago after spending a year in a nursing home. He was a recipient of Medi-Cal. After his death, the state sent out an estate claim form asking about his assets. She was advised by an attorney at that time that, as a widow, her house would automatically pass on to her children. Last month, the director of the funeral home I know said that it wasn’t so. He said that the state could step in and her children would have to fight to get their inheritance.

Marge

Dear Marge,

Your friend the funeral home director knows what he’s talking about. Medi-Cal spent money on your friend’s husband’s care and it wants that money back. Prior to 1993, Medi-Cal could assert an estate recovery claim against only an estate subject to probate in the courts. Back then, a revocable trust or a joint tenancy deed was enough to defeat a Medi-Cal estate claim. In October 1993 the federal government enacted new laws that extended Medi-Cal estate claims to an “expanded estate” including assets held in joint tenancy or in revocable trusts.

The estate claim for a married Medi-Cal recipient is deferred until the death of the surviving spouse. That means when your friend passes, her children will have to deal with Medi-Cal. They will receive a letter from the Department of Health Care Services Recovery Section demanding repayment of the money spent on their father’s behalf by Medi-Cal. The amount of this claim will be limited to the value of the services provided by Medi-Cal or the value of the assets he owned on his death, whichever is less. If he died owning half of the home, then that half of the home will be subject to Medi-Cal estate claim if your friend owns it upon her death. If he died owning nothing at all, then Medi-Cal gets nothing.

There are some exceptions. Medi-Cal may not recover anything if your friend is survived by a minor, blind, or disabled child. Medi-Cal may also grant hardship exceptions to its collection attempts, although frankly we have never heard of a hardship waiver actually being granted. To prove a hardship exists, you usually have to prove that the children provided care to their parents and kept them out of a nursing home, and off of the Medi-Cal rolls, at least for awhile.

Your friend’s children can appeal the collection through an administrative hearing, and they can try to negotiate a settlement with Medi-Cal. They, and anyone else who receives a Medi-Cal recovery claim, should consult with an elder law attorney to see what can be done to fight it.

The bottom line is that your friend does not have to worry about herself. The State will not take her home away, and it will not force her to pay her husband’s nursing home bills. But if she does nothing, her children will lose part of their inheritance. It is not too late to deal with this problem now. If she’s willing to do so, she can shelter her home in an irrevocable trust that will be exempt from the Medi-Cal estate claim. She should consult with an elder law attorney experienced in Medi-Cal planning to discuss what can be done.

Len & Rosie