Interrupter CheckmarkInterrupter IconFacebookGoogle PlusInstagramGroupRamsey SolutionsTwitterYouTubeExpand MenuStoreCloseSearchExpand MenuBackStoreSign in

Ask Dave

Caring for Mom

Dan says his mother fell ill and spent three months in the hospital. His father has hired in-home care at $3,500 a month. Should they try to save his dad's cash or allow it to deplete for nursing home purposes?

QUESTION: Dan in Ohio says his mother has fell ill and spent three months in the hospital. His father, who is in his 80s, has hired some in-home care. The care is $3,500 a month. Should they try to save his dad’s cash or allow it to deplete for nursing home purposes?

ANSWER: It helps to understand that the nursing home provided by the government is welfare. It’s for poor people. When would you take food stamps or subsidized housing for your mom? It’s the same time you would take a Medicaid nursing home. For me, after I put it in that light, that would be after my family’s done all they can do, and your dad has done all he can do.

In other words, you don’t take government welfare unless you’re broke. That’s my view of it anyway. Now, the government does allow him to keep a certain amount of cash and still qualify for Medicaid. You need to find out what that was; I think it used to be $70,000. But you need to look into it.

Their method for qualifying her for welfare includes him keeping a certain amount of cash, because they understand he’s got some basic needs that need to be met as well. So they don’t clean them out, but you do need to find what that is.

Conceptually or philosophically, I would accept help after I’ve done all I can do. If I’m in your shoes, there are two things. The first thing you need to do is find out that that limit is, and he needs to spend down to what that limit is. The second thing is I want your family to do what it can do to help if they are able to, because that’s what we would all do rather than see them on food stamps.

If he owns a lake house, I guess the lake house is going bye-bye before she qualifies for welfare. You can’t buy it off of him cheap because there is a five-year look-back. If you pay market value, then you could do it. And he could use that money to keep her wherever. There’s no reason to keep it in the family if he doesn’t want to. He could just sell it; he doesn’t necessarily have to sell it to you.

What I would have him do is spend down to his limits because that’s him taking care of his wife as he should. Then the kids kick in and go as long as they can go. If you’re not able to go as long as it takes, then she would qualify for welfare. But if I’ve got money in my pocket, I’m not going to ask a family member to go on food stamps.

Keep in mind that the government has the right to come back and look on any transactions that have happened in the last five years. If you move that lake house into another name, they can look back five years later and undo that. And if you did it improperly, it can even be criminal, because it’s considered welfare fraud. You don’t want to hide stuff. You want to do the right thing—pay your bills as long as you can according to the exemptions and the guidelines, and then if there’s nothing left to do but use the welfare, then you use the welfare.