John called asking for help with Sally who was showing signs of early-onset Alzheimer’s disease. His concern was that if she needed long term care the exorbitant expense would quickly exhaust their modest assets. This concern was magnified by the fact that John was 59 years old and had been out of work for over a year. I advised re-drafting their estate planning documents to avoid disqualifying Sally from certain government benefits programs should John pre-decease her. They also executed Powers of Attorney and Health Care Directives to avoid a guardianship situation if she became incapacitated.
As fate would have it, Sally’s mental state deteriorated rapidly and she was on the verge of institutionalization only one year later. In order to preserve the family’s modest assets I helped the family qualify for Medicaid. I first advised borrowing money from a home equity line of credit (HELOC) to increase the family assets for the Community Spousal Resource Allowance (CSRA) calculation. This is a legitimate strategy which increases the family assets on the first day of the first month of institutionalization, thus entitling the well spouse to keep more money. This strategy allowed John to survive financially while looking for a job. Once Sally entered an institution, I advised paying off the HELOC and paying down the mortgage – both allowable spend downs. The long term care facility cooperated, requiring only one month of private pay. Soon thereafter, Sally was approved for Medicaid.
As a post script, John and I visited Sally in the institution at the end of the Medicaid approval process. She no longer recognized John even though one year earlier she was obviously capable of signing documents and understanding their import. My practice is seeing an influx of early-onset Alzheimer’s type dementia. It is very disheartening to see, but I am glad I have the ability to help with one component of the crisis and provide a service to these young families in desperate need of advice.