Entering assisted living- how to pay

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It looks like my in-laws are finally willing to enter assisted living. I will try to get them in with their estate planner but would like to hear from BTDT people about how they got the money for the entrance fee. Does it make the most sense to sell the house first or pull from investments/reserves? I think net worth is between 1.5-2 .5 million including a vacation condo unfortunately purchased this year. I think it will be mentally difficult for them to sell one or both homes so we could potentially look at renting them out if it makes sense.

No one can really answer this. There are just too many unknowns. Rushing into a sale is often a mistake, as the capital gains hit can be substantial. Talking to a professional is the right thing to do and no big financial decisions should be made until you do. Renting isn’t necessarily the answer, but don’t be too freaked about “being a landlord,” if the property is right you can generate significant income and easily pay a property manager. If the vacation condo can be AirBnB’d that can be very lucrative. In any case, just wait until you talk with the estate planner. If the can’t talk to you knowledgeably about income generation now, you need to speak to a fee based CFA as well.

+1. Lawyer here but not estate lawyer. This is a complicated issue on both state (varies) and federal law -it gets especially problematic under Medicare. Please see an elder law or estate law specialist now before doing anything. That's what now deceased friend did when her husband went into care. In her case (cal law), she was advised to go through savings and hold on to the house (owned free and clear). When he went was to exceed federal and hospice care allotments fshe would be responsible gor everthing out of pocket) the instructions were she was to file for divorce to save the house for her own support. He died shortly before she was to do that. Anyhow consult an elder law expert to find out where to start. You need power of attorney of course.

Thanks to all who replied. We do have power of attorney already which I think will be helpful. Like many elderly people they are not very flexible and are worried about leaving inheritance- my husband and I agree the best gift they could give us is being safe and well cared for when we aren’t available so we encourage them to spend on things that make their lives easier. Since we aren’t in an emergency we can up the home health for now while we get things in place. I do believe there is long term care insurance for both of them so that may help (or complicate) things.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

I’m sure, but getting them to agree to this was a Herculean effort, they have friends at a certain place, very near us, and feel comfortable with the security of their endorsement.

Find another place close to that one. That's not worth it and if they are unhappy they are locked in.

It sounds like the in-laws remain relatively cognitively sound and are using their own funds to pay. Not sure why you think OP has the ability to override their preferences for their own living situation.

Yes, they are mostly cognitively sound and paying for whatever they need on their own but they do ask for my help with big decisions . Its their money and if they want to buy a gold toilet I genuinely don’t care

[Anonymous]

FWIW, a lot of places with entry fees give you some time after move-in to make that payment, so your ILs could move in, sell their house, then pay.

But I'm not opposed to entry fees, so YMMV (I am absolutely against for-profit CCRCs; we all have our biases)

[Anonymous]

Talk to the facility. They deal with this all the time and sometimes bridge loans are available until the home is sold. Also be prepared for the facilities to require them to disclose their financial situation and ability to pay the fees before they are approved.

[Anonymous]

Use their cash to move in and then work on selling the house to replenish their savings. It’s too stressful otherwise.

[Anonymous]

Anonymous wrote:It looks like my in-laws are finally willing to enter assisted living. I will try to get them in with their estate planner but would like to hear from BTDT people about how they got the money for the entrance fee. Does it make the most sense to sell the house first or pull from investments/reserves? I think net worth is between 1.5-2 .5 million including a vacation condo unfortunately purchased this year. I think it will be mentally difficult for them to sell one or both homes so we could potentially look at renting them out if it makes sense.

Are they going to Assisted living or Independent living in say a CCRC?

Either way, I'd use investments, then once they are out of the house, quickly get it cleared and sold. It can be challenging to get parents to clear stuff out and dispose of it--but moving to a much smaller place will speed up that process, and once they are in the AL/IL, then you have no choice but to donate/trash the rest

[Anonymous]

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

If you have the money, they are not a rip off. If you enter a CCRC while healthy in IL, yes you pay more. But with the entrance fee and the extra, you are guaranteed "any advanced care" with no additional costs (except for the extra 2 meals per day typically). And in most of them, if one parent goes to "advanced care" (memory, assisted living, nursing, etc) the other gets to keep the same Ind Living apartment for no increase cost. For my parents, it would only take ~1 -1.5 years for each of them to be in "advanced care" to pay for itself.

In the meantime, my parents are enjoying life to the fullest, never have to worry about cooking or cleaning or fixing anything. And the key part---should you need "advanced care" there are always spots kept open for the CCRC residents, so it's not a search and pray process for finding the care when they need it. Also, I live 3K miles from them, so it's nice to know I can manage an emergency from a distance and they will be well taken care of. Also, the IL spouse can visit the other one daily as it's right there---they will never be in separate facilities where someone has to drive one to the other.

But in reality, if you have the money, this is what you have saved for. Why not spend it for a nice last 5-20+ years?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

I’m sure, but getting them to agree to this was a Herculean effort, they have friends at a certain place, very near us, and feel comfortable with the security of their endorsement.

Go for it. Ignore the PP. A CCRC is an excellent choice! My parents are in one (we had to pay the high entrance fee). It's worth every penny to know they are well taken care of and can immediately go to "advanced care" if/when it's needed. Also the other parent can always visit the one in advanced care, and can even bring them back to IL for part of the day (if appropriate).

When my parents finally agreed to sell their home and move into one, we jumped on it! And my parents barely "qualified" even with us paying the entrance fee. Been there 6 years, and they love it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Will their income pay the fees or will that be drawn down from net worth?

The monthly fees can be paid with SS/pension

So go for it! Then get the family home ready for sale, spend a month clearing it out (trashing anything you and your siblings don't want) and be done with it. I'd consider selling the Vacation home as well. Sure you can VRBO/AirBNB it, but you have to manage that or hire someone to manage it. And pay for maintenance/any issues. Unless you want to do that, just get rid of it and invest the profits.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

I’m sure, but getting them to agree to this was a Herculean effort, they have friends at a certain place, very near us, and feel comfortable with the security of their endorsement.

Find another place close to that one. That's not worth it and if they are unhappy they are locked in.

if their friends are happy there, OP parent's likely will be too. And no, you are not locked in. Most give you back the "entrance fee" over the first 48 months. So you'd get much of it back if you leave after 6 months. However, very few leave from a CCRC because they don't want to live there---most leave by dying. My parents are at a high end CCRC, and only 2 people have left in the last 6 years---both because they were younger and widowed and "met someone who lived at another place" and went to move in with them. If their friends like it, the parents most likely will too.

At that financial level they can afford it---heck they can make the payments with SS/pension, so only loss to potential inheritance is the entrance fee. Seems like a smart plan to me

[Anonymous]

Anonymous wrote:

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

+1. There are a number of nice places in Montgomery County; placed my Mom this year so toured a lot homes; with a one-time move-in fee ($4K) and then just monthly rent.

Hi - Do you have any recommendations based on your search?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Plenty of places without entrance fees. Those places are a rip off.

I’m sure, but getting them to agree to this was a Herculean effort, they have friends at a certain place, very near us, and feel comfortable with the security of their endorsement.

Find another place close to that one. That's not worth it and if they are unhappy they are locked in.

It sounds like the in-laws remain relatively cognitively sound and are using their own funds to pay. Not sure why you think OP has the ability to override their preferences for their own living situation.

+1

They have plenty of money to go to a CCRC. They can easily afford it. Why wouldn't they? It's the next step. Luckily, they have already downsized to a condo, so OP will have a lot less crap to deal with (the downsizing to a 2 bedroom from a major family home is difficult process). Why not be around others they enjoy and enjoy life to its fullest. Those CCRCs have tons of activities and help keep the residents mentally astute. My parents have a much busier social life now that it's a short walk from their front door. There are activities for everyone---including "keeping fit", swimming aerobics, etc, glee club, chess club, knitting club, off campus trips to theater, baseball, etc. For a small fee, they will even drive you to doctor's appt (think $30 for 5 hour roundtrip---they are required to stay in parking lot wherever they take you).

[Anonymous]

Anonymous wrote:FWIW, a lot of places with entry fees give you some time after move-in to make that payment, so your ILs could move in, sell their house, then pay.

But I'm not opposed to entry fees, so YMMV (I am absolutely against for-profit CCRCs; we all have our biases)

Are there CCRCs that are not "for profit"? I mean it's a business, they are providing services to the residents.

[Anonymous]

OP, why are in laws reluctant to sell the vacation home? I get the condo since psychologically they want a place to go if the AL place doesn't work out. But I think there is an adjustment period going from being truly independent in your own home, to having to "follow the rules" of a new living situation. They also have to deal with lots of personalities of the other residents. Not everyone is super social.

Depending on how this affects their taxes, I would really try to sell the vacation property to pay for the entrance fee. (I also think they definitely need to go where they have friends if they can afford it.)

I know of some places that will do a bridge loan with the pending sale of a home. I also know people who either pay for their parent's entrance fee, or contractually provide the bridge loan in the pending sale of a home. I also know someone who paid for her parent and basically put a lien on the will?? Not sure exactly how it worked, but basically the estate had to pay her back before proceeds were distributed to heirs.

[Anonymous]

Echoing select prior posters:

1. Sell nothing. Convert nothing. Transfer nothing. Do nothing before you/they have gotten advice from an experienced attorney affiliated with the National Academy of Elser Law Attorneys.

2. There are a variety of products and arrangements that get colloquially referred to as “assisted living.” There is a place down the street from me that is month to month based on level of care. Need too much care, or the wrong kind of care, or just prove to be a tough customer? Out you go. Other places focus on “memory care.” Others are “nursing homes.” And then there are the “continuing care” facilities that others have posted about — come in healthy and stay there to the end, whatever it brings. Be sure you know what you’re shopping for.