Originally posted 12/31/16
Things don’t work the way we think they do. There is no “They” in our present system (as in, “They need to help you/get him/take care of…” There is YOU. And your planning and your support. That is all.
Biggest point? You probably have life insurance. And you really, really should. But are you prepared for what happens if the person *doesn’t* die? It sounds cold to bring it up, but believe me, it’s more cruel to live it without being as prepared as possible. We had some glaring errors in our preparation, but we did one thing right--
We always signed up for and maxed out on the Long Term Disability Insurance through Pat’s work. We didn’t know exactly what it meant, to be be honest, but we knew it sounded better than nothing. In the end, this has saved us financially. We will receive 60% of Pat’s monthly salary until he is 65. Let me draw you a picture here: If we hadn’t done that, weeks after his stroke, we would have had 0 income from Pat, who was—and now continues to be—our primary financial support. We would have blasted through short term disability, cashed in his vacation time, and then nothing. Absolutely nothing. All while I was at the hospital 8+ hours/day with him, then also being Mom, keeping our household running, and planning the next steps in his care. If you have an option for Long Term Disability Insurance, TAKE IT. It’s not very much monthly, and can literally save you. Even today, two years later, it is saving us, despite this interesting twist: The insurance company requires that you file for Social Security Disability, then once it’s awarded, they deduct that amount from what they pay monthly, so you can never get over that 60%. It’s in the fine print.
I cannot imagine our lives without that net. We would be destitute.
Next, and equally important? POWER OF ATTORNEY. I thought we had done that. I really did. But when the time came, I couldn’t find it. Again, here’s the picture: Pat had a stroke. He was unconscious for days, and when he came to we learned that he had expressive aphasia. What this means is that when he tried to talk, the words came out like senseless sounds. Same when he tried to write. He could understand what we said, but couldn’t reply. So here I am at home, trying to find out about say…whether there would be any money coming through on our regular direct deposit. If I’d be able to pay our mortgage and electricity. Whether we continued to have health insurance. You know, little things. And NO ONE would talk to me. I literally could not find out the answers to any of these questions because I didn’t have Power of Attorney and Pat couldn’t speak. Or write sensible sentences. We totally lucked out. His signature—rote learning—was stored in a different part of his brain, and he could sign his name. A friend drafted a POA for us and the hospital notary stood by while Pat nodded and pointed to agree to her questions and just like that, the veil was lifted for me. I could legally act on his behalf. What if that hadn’t been the case? What if he had remained unconscious? In the middle of this tremendous all-consuming life event, I would have been in the process of filing for power of attorney. I can’t even imagine.
Next: Do not have all your retirement investments in in one person’s name! This was a big one to learn: If your legal partner ends up needing to live in a facility, such as a nursing home, health insurance doesn’t cover it. These places are incredibly expensive—here in the Philly area, your garden variety nursing home will cost about $10,000/month. That’s a Medicaid-participating facility, not a private one. You are probably wondering how you could possibly pay for that? Well, most people can’t. So what happens is that you spend down all of your assets in that person’s name—I am spacing on the exact number and it’s probably changed in two years, but it’s under 10k. So every month, you pay the nursing home their 10k. You liquidate your assets. Your retirement. Everything you’ve worked for, until you are financially destitute, and THEN you can apply for Medicaid (which is FOR the financially destitute) and they will take over the payment. Here’s the kicker—BEYOND what your monthly income is. So that 60% of of Pat’s income that we get through the long term disability insurance/month? That would have gone to the nursing home. And Social Security Disability? Same.
I consulted with an attorney who specializes in the field, and had that been our situation, the law would have allowed James and I to keep something like $1800/month to live on, and the rest would have gone to Pat’s care. For as long as he was in such a facility. And our retirement? Well, Pat’s company doubled any money we put away, so we had almost all of our resources invested on his end. Definitely the way to maximize on your retirement. Also works if the person whose name the investments were to pass away—you still get more bang for your buck. But again, what if the person does’t die? What if they require ongoing care? That money is going nowhere but to the long term care facility. And once disaster has hit, you can’t transfer it over. The assets couldn’t be transferred to my name. That’ illegal. So while there were some allotments where we could use it to pay off our mortgage and for Jamie’s education, the majority of our retirement funds would have been spent on care. However, any resources in the well spouse’s name cannot be touched by Medicaid. So I could make a kagillion dollars/year (wouldn’t that be great?) and my partner could be on Medicaid. I could have have a kagillion dollars in retirement assets and Medicaid couldn’t touch them.
This was interesting information to have, just about 20 years too late. It’s an interesting twist to the choices of parenting roles we made all along. Had things gone a little differently, those choices—for me to have more of the parenting and less of the income responsibility—could have devastated us financially today. Would I do it differently if I knew what a vulnerable state we could be left in IF—and it’s a giant if—we had ended up with a situation in which Pat required care? Could I even imagine such a thing 26 years ago when we seemed invincible? I don’t know. I’m offering this information as one more factor to consider—as if these choices aren’t hard enough!
Either way, I strongly suggest that everyone evenly distribute assets between partners, just in case.
I read what I’ve written above and what shouts out to me is my privilege. That we started this journey with assets to lose in the first place. Not a day has passed when I haven’t considered what this experience would be for someone who works an hourly wage. Who doesn’t have insurance. Who doesn’t have family and friends to fall back on. I imagine being who I am but in living in a society where men are the protectors. Where I couldn’t get a job. That said, there is value to passing along this information. I am aware also that circumstances vary by state, my recommendations are given through the lens of my experience and memory, and that there may be more options out there. I sure hope so. My whole objective here is for people to think ahead and know how the process can feel in the moment, so they can plan.
Wishing us all health and peace in the New Year.