What to do when a parent refuses to let you know their plans after death

Dear Len & Rosie,

My father is 90 years old, divorced, and lives in a retirement center. My sister and I are his only children. He has been reluctant to tell us of his plans for his final days here on Earth. I know that he has a paid up insurance policy and I have the policy number. When I called the insurance company in San Ramon, they refused to give me any information. My sister and I do not have the means to bury him without some financial assistance, and he will have some expenses that will need to be paid. What can we do in the event he passes away?

Lynetta

Dear Lynetta,

The insurance company won’t talk to you for the simple reason it owes your father a duty of confidentiality. They just can’t spill the beans about his life insurance when anyone calls. Just because you’re his daughter doesn’t mean you have the legal authority to access your father’s private financial information and legal documents. You could do this if your father gives you a power of attorney or if he becomes incapacitated and the court appoints you as his conservator.

Unless and until that happens, it’s up to your father to decide whether or not he should clue you in about his finances and his estate planning documents. What you should do is to talk to your father about this and try to convince him that he should trust you and allow you to help him. You should be careful about this. It’s apparent that your father is a very private man. He could disinherit you if he decides that you’re too “pushy.” Make sure that he understands that you will respect his wishes no matter what they are. You and your sister should act together on this, so your father won’t think that you’re trying to get everything for yourself.

If your father refuses to let you know what his plans are, there’s nothing you can do about it unless he loses mental capacity and is put into a conservatorship. You and your sister may have to pick up the pieces after your father’s death. Finding his financial information and estate planning documents could turn into a morbid scavenger hunt where you have to lift up his mattress to look for his safe deposit box key. Tell your father that if he won’t clue you in he should at least be organized enough to make it easier for those who will have to manage his estate after his death.

The only consultation we can give you is that you don’t have to do it. You and your sister will not be liable for your father’s debts after his death, and you do not have to manage things if you do not want the responsibility, even if you are named as executor or trustee in his will or trust. You can, however, be compelled to pay your father’s cremation or burial expenses because you are his next of kin.

Len & Rosie

Sheltering your assets from Medi-Cal Claims

Dear Len & Rosie,

My mother who is 94. I was caring for her at home until she got too frail and was moved to a residential care home. Everything was going great until she fell and broke her hip, was sent to the hospital and things just went downhill from there. She was discharged to a skilled nursing facility for recovery but it hasn’t gone well.

I just found out that her Medicare payments will stop because she’s not making progress. The care home can’t take her back because she requires too much care. The private pay cost for the nursing home almost $10,000 a month! My mom has retirement income of $2,900 a month, some savings, an IRA and the house that I’m living in which is in a revocable living trust. Do we need to spend everything before Medi-Cal will step in to help? And what’s going to happen to the house? I’ve heard the State will put a claim on it. Is it protected because it’s in a trust? I’ve heard there’s a five year “lookback” and unless she planned ahead there’s nothing that we can do now. 

Grace

Dear Grace,

Your situation is very typical. Medicare pays for up to 100 days of nursing home care, but only if your mother needs rehabilitation or skilled nursing care and shows continual improvement. It’s not unusual for someone as old and frail as your mother to find it hard to recover from such a traumatic event.

You won’t have to completely deplete your mother’s assets before she can get Medi-Cal assistance. The IRA and any other retirement accounts are exempt as long as your mother is taking her minimum required distribution. As far as the savings goes, there are strategies available to save some or most of it, such as conversion (putting money into things Medi-Cal doesn’t count) and gifting, which is allowable and won’t cause ineligibility if done correctly. 

You’re completely right to be concerned about her house. It will be exempt for qualification purposes as long as you state she has an intention to return to it. You don’t have to prove that she’ll actually be able to return. You just need to check a box on the Medi-Cal application to satisfy this requirement. 

However, the State of California will make a claim against your mother’s home after her death if you’ve done nothing to shelter it. Fortunately that’s a lot easier than it used to be. Since January 1, 2017, all your mother will need to do to shelter her home is get it out of her probate estate, ideally by creating an ordinary revocable trust. Alternatively, she can create a more specialized irrevocable trust if the plan is to rent out the home or sell it, as such a trust would prevent the rental income or the proceeds of the sale of the home from affecting her Medi-Cal eligibility.

The bottom line is that while you should review your situation with an attorney who does Medi-Cal work, it looks like you’re in pretty good shape and won’t have to do much to qualify your mother for benefits.