" A portion of the proceeds from the sale of the home should be used to
purchase
a "Single Pay (with increasing benefits) LTC policy.

Cal Lester CLU

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:Tw9Zf.980$Fy2.64[at]newsread3.news.pas.earthlink.net...
- quote -

What about investing in long-term care insurance? A good policy would give
them more options in nursing homes or assisted living facilities that might
not take medicaid patients.

Actually, looking into moving into assisted living might be a good option if
there's a really nice facility available nearby. Some have "condominium"
type plans where you buy a spot and the maintenance fees increase as the
level of care increases (I'm not sure if there's actually any "ownership"
like there is with a condo). They could live in the lower level of care
since they're fairly independent plus it would put them into a social
situation where they could make friends more easily and not rely on David
for all their social interaction. As they moved into higher levels of care,
they would still be together - if not in the same room, at least in the same
facility where there wouldn't be transportation issues to visit each other.

Leigh

"herlihyboy" <ryan.parmenter[at]gmail.com> wrote
- quote -

I think you all mean Medicaid here.

Interestingly, Wikipedia for one reports that Medicaid "has
become the default nursing home insurance of the middle
class." http://en.wikipedia.org/wiki/Medicaid

There are upscale nursing homes that refuse to work with
Medicaid patients. This might give one an idea of the
importance of shopping around if and when one's parents or
grandparents do need nursing home care.

Otherwise, I concur with the two posts on this. If there's a
legal way to hide assets, there isn't much point to doing
so.

dwheat[at]sriworld.com wrote:
- quote -

They worked their whole lives and built up their assets so the money
would be available in the case that it is needed [i.e., for a nursing
home stay]. I think trying to move or hide assets so you can take
advantage of welfare [Medicare nursing home] is wrong. It takes money
away from a system that is in place to benefit people who really need
it.

Ryan

Doug writes:
- quote -

But isn't taking care of your needs one of the reasons they have
assets? What's the point?

Dave

For the record, the couple is in good health considering their age
except for knees. Rent is about $1,000 for a two bedroom apartment.
Good to hear that capital gains is not an issue. The concern about
nursing homes is that if they convert their home equity to cash and one
of the couple needs nursing home care, all of their assets would be
exposed in a Medicare determination. Seems like an attorney is
required to answer this question. Thanks for your thoughts.

Doug

<dwheat[at]sriworld.com> wrote
- quote -

IIRC the first $500,000 for a married couple in capital
gains on the sale of a primary residence is not taxable.
That's new as of several years ago.

- quote -

You said, rightly, that the proceeds from the home sale
would be in "safe investments." To me, that means a money
market fund, short-term high grade bond fun, or short-term
(no more than maybe a year or so) CDs. Maybe ladder them at
shorter intervals for a bit more flexibility for this older
couple.

Someone should probably run the numbers, but I'm betting an
apartment is an excellent choice here. In the alternative,
you might seek rentals within condominium communities.

For how much do apartments rent in the area under
consideration, anyway?

How is the health of this couple?

dwheat[at]sriworld.com writes:

- quote -

Nope. Not in a good few years. Long term Cap Gains are not taxed on
a primary home up to $500,000 for a couple.

- quote -

That's a much more complex issue. I'll hope that some others
will lay it out more clearly, but if one spouse goes into a
nursing home under Medicaid (note - *not* Medicare!) the
assets of the couple could get hit, though it has exclusions
for primary home and a certain amount of income.

The primary home exclusion comes in if either the other spouse
is still living in that home, or if the patient in the nursing
home is expected to return to that primary home.

Additionally, a modest monthly income is excluded (something
like $1700/mo).

There are some other things you can do, but really, this is
a complex area and one not very suitable for folks giving
advice over the internet. You need to consult an attorney
in the area who specializes in this, in your state.

You don't need to worry about cap gains, but if you want
to protect assets (at a minimum such that a surviving
spouse can keep his or her home and basic standard of
living) you need to consult an attorney.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

My friend David's parents are 81 and 82 and looking to move closer to
David and their grandchildren. David and his parents live in
Massachusetts. They wonder what the best housing strategy would be for
them.

They own their house outright, which has been their sole residence for
25 years. It is probably worth $350,000. They have less than $20,000
in cash assets. Their income consists of social security payments and
a very modest pension. They would like to move into an apartment or
condominium so they do not have any upkeep.

There are many suitable apartments available in the area and the couple
likes the idea of freeing up their money tied up in the house.
However, there is a concern selling the house and putting the money in
safe investments would a) cause a big capital gain tax event, and b)
potentially jepardize the financial situation of a spouse if one of
them needed to go to a retirement home.

Condominimums in the area generally do not offer one floor living and
thus are not that attractive. However, prices for two bedroom condo's
generally go for around $250,000. Maintenance fees are unknown. Taxes
would probably be $3,000 per year.

There is a nice retirement community in a neighboring town with units
available for a $275,000 introduction fee (which is 90% refundable) and
a $1,200 monthly fee which includes most expenses except utilities.
There is a concern that a) this option is too expensive, b) would
severely limit flexibility, such as using reverse mortgage to get
access to equity, c) expose the couple to a capital gain tax, and d)
put a spouse at risk not being able to meet monthly fees if one of the
couple dies.

Any thoughts on options would be helpful.