$280,000 in Assets, but I think I should apply for A&A for 81 year old mother

Discussion in 'Eligibility Questions' started by rancol23, Jul 7, 2014.

  1. rancol23

    rancol23 Newbie

    Hi,
    I searched the forums and could not find anything specific to my situation. Though from reading other posts $280K sounds like sufficient assets, I come to the conclusion that my mother needs A&A. Tell me honestly if I am wrong, if I should let my mother spend down her assets, etc.

    My father died recently, so my mother is now receiving $1700/mo. social security and a $200/survivor pension from my Dad's employer. Mom lives is in an ALF, has a heart condition and needs oxygen constantly. Her ALF is $4000/mo., and I estimate her total monthly expenses are $4500 / mo. So, she needs to pull $2600/mo. from her $280,000 savings. With interest rates near zero, and ALF cost rising as her required care increases with age, I see her assets going to 0 in 8 years.

    If we took $230,000 of her assets and bought an annuity that is acceptable to VA (and Medicare just to be safe?), I could get Mom approx $2000/mo. income stream. Combining the $2000/mo with her current $1900/mo income, her countable income would still be below zero and she'd be eligible for A&A.

    Am I thinking correctly? Is this not the right course of action to give my mother the most financial security possible? Your feedback would be greatly appreciated.
     
  2. vetadmin

    vetadmin Administrator Staff Member

    We cannot support efforts to restructure her finances to qualify for this pension.

    If you should choose to do so, keep in mind that there is a bill sitting in Committee that would put a 3-year lookback in place, so this could come back and be a real issue for repayment for her.

    This pension is intended for those who wihtout it, could not afford proper care and services.
     
  3. rancol23

    rancol23 Newbie

    Should I feel insulted by how you worded your response? When I discovered your website and spent much time reading very useful posts and trying to understand this VA benefit, I came to my own conclusion that my mother's financial situation fell within the spirit of the A&A benefit, and I would be remiss if I did not try to obtain the security that an A&A benefit would offer. By purchasing the proper annuity (the type that has the State as a beneficiary and not family members) I would help her avoid a future situation where she would run out of money and have to be moved to a sub-standard nursing home. If you reread my post, you'll see I asked for your honest opinion about my admittedly less than expert assessment of the situation. Perhaps I am misreading your response, but it gave me the impression that you think I am trying to game the system, which I am not.
     
  4. vetadmin

    vetadmin Administrator Staff Member

    No, please do not feel insulted as that was not my intention.

    With your Mom having $280,000, she is well above the income asset tests, and very fortunate to have funds to pay for her care.

    We do not promote moving assets as it is not in the true spirit of this pension, but more to the point, we are not financail advisors, nor legal counsil.

    With the bill sitting in Committee, she could end up owing all monies paid out when it would be disclosed that she did have enough assets to pay for her care, but chose to restructure.

    So again, since we do not advise on financial matters, and allowing for the potential of the bill presenting an issue for you and her down the road, there was no intention other than sharing information and considerations.
     
  5. rancol23

    rancol23 Newbie

    Thank you for further expanding on your response. I understand what you are saying. And, thank you for the good work you are doing. It is inspiring. I have made a small donation that I hope contributes to furthering your good work here.

    As a follow up, here is a relatively recent article on this bill that is now in Senate committee:

    http://tinyurl.com/kobhwnd

    Two things that jump out at me in the article:

    1. This lookback concerns gifting of the assets where the A&A applicant is not receiving fair market value. Purchasing an annuity where the A&A applicant nor his or her relatives are the beneficiary is not gifting.

    2. There is a grandfather clause in this bill, so if you apply now, before the law goes into affect, you are exempt from the law.

    The annuity I am looking at would not give me or any other of my mother's relatives a penny if she should die the day after the annuity was purchased. The state would be the beneficiary. We would purchase this annuity as a form of "longevity insurance". We would only come out ahead if my mother should live another 8 - 10 years, which less than likely given her current health, but this would give her peace of mind, as she worries about her children having to dip into their retirement to care for her in her final years.

    All of the above being said, I respect that you cannot offer advice on this. I am just putting it out there, as other readers might have similar situations. Thanks again!
     
  6. vetadmin

    vetadmin Administrator Staff Member

    You have to do what is bet for your Mom and her situation.
     
  7. VA Legal Team

    VA Legal Team Full Member

    Rancol,

    You're reading of the bill is basically correct. With regards to the grandfather clause, you are definitely correct (unless of course it's changed, which may be vetadmin's point; I don't see that happening but hey, it's the VA).

    Sounds like you purchased a "medicaid compliant annuity." If you haven't already purchased, you may want to speak with someone that knows about annuities that aren't medicaid compliant to start, but can be converted if necessary.

    The VA doesn't require immediate annuities to name the state or fed govt as primary beneficiary (as opposed to state medicaid programs). So if your mom were to die half way through the annuity, the unpaid half of the annuity may be in jeopardy.

    To be clear, you shouldn't take the advice of someone on the internet. If you really want to do your due diligence and not make a mistake that could cost your mom money, I'd meet with an attorney.
     
  8. greenpad

    greenpad Newbie

    Hey Rancol, Your elder one has $280,000 in assets and you have the audacity to ask a VA employee for free advice as to the best way to loophole the system. She tells you to go jump in a lake and now you're insulted. You have quinones I'll give you that.
     
  9. jscott

    jscott Jr. Member

    Rancol,

    Thank you for posting the link to the article -- very helpful as I was not familiar with this pending bill.

    Also, please ignore the insults of the other poster. This forum is intended to answer questions and help people with A&A issues, just like us. IMHO, just because your mother has plentiful assets is no reason for that person or others to bash you for asking a legit question.
     

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