Quote:
Originally Posted by Isaac Zachary
I've ran into an interesting situation here in Colorado. Taking care of my elderly parents, we've received letters saying that since they are on Medicaid and Medicare, their "estate" will become available for the government for reimbursement of any and all medical expenses that have been incurred by them and paid for by Medicaid. So it looks like that means no inheretance.
It also would seem to suggest that if I end up in the same situation, then paying some 50% of income for a condo that I will finally have paid off at the age of 80 will also probably not be of any worth as an inheritance for my children.
Not that it isn't good to pay for things when you have the means to do so. But it does make owning a house less appealing, at least here where my family lives.
When my parents pass away I will then look into whether it would make sense to buy a house somewhere else.
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Medicare and Medicaid are two different things. Medicare is for seniors while Medicaid is for the poor. Medicare makes no claims on estates.
For a senior to receive Medicaid they have to declare themselves poor enough to not be able to pay their medical bills. Once that happens Medicaid takes over payments AND keeps track of the amount spent on that senior's medical care. Once they pass - Medicaid looks to recoup money spent from any estate. Basically Medicaid is the first to "inherit" any money from the estate but they can only collect up to what they actually spent. It isn't an all or nothing situation like many people think.
Which makes complete sense. Someone can't say they are too poor to pay their medical bills when they are alive and then turn around and give away their money once they die.
Now there are ways around this but they take estate planning in advance. For example both my grandmother and aunt created living trusts to protect their home in case they had to go on Medicaid. (The trust technically owned the house instead of them but they were allowed to live in it) Neither ended up needing that provision. My grandmother passed suddenly and my Aunt died of Parkinson's related illness before she burned through her savings. My aunt was close though - she had funds for about another 9 months of full time in-home care before we would have had to sell the house and place her in a nursing home.
EDIT: Also if you are actually taking care of your parents instead of hiring someone or in addition to hiring someone you should be getting paid out of the estate at the going market rate. That is what my aunt did. My father cared for her 4 days out of the week and then she paid an in-home health aid for the other 3 days of the week. (He for real stayed with her 24 hours a day and did the same role as the hired aid) It was all above board with 1099's filed and the income recorded and taxes paid.