Question

Helen Adams, 81 years of age, relates to you that her husband, Jim, 83 years of age, has Alzheimer’s, but she is caring for him at home. He is still quite manageable for the present, but she has no idea for how much longer. They own their own home subject to a line of credit secured by a mortgage. It is worth $300,000 and the balance on the line of credit mortgage is $20,000. Jim has an IRA worth $160,000 from which he is drawing $2,000 per month, the minimum required distribution. They have joint ownership of a bank account with $24,000 in it, and one automobile worth $9,000. Helen has $700 per month and Jim has $1,200 per month in Social Security income. Helen and Jim have a son, Don, 57 years old, who is married with three children and who lives twenty minutes away by car. They also have a daughter, Marie, 53 years old, who is married with two children and who lives half way across the country. Helen says she has a power of attorney document from Jim, who cannot understand financial matters. She asks what can be done to protect their assets from nursing home costs. What preliminary issues (prior to actual planning) do you need to discuss with Helen? What might be able to be done to protect assets against a spend-down upon Jim’s admission into a nursing home? Explain your answers.

Answer 1

Home	300000
IRA	160000
Bank	24000
Automobile	9000				H	J
Total	493000				700	1200	1900
LOC	20000
Net worth	473000
Firstly we need to discuss how much is the interest rate available in fixed deposits with banks , and how much is the interest rate they are paying on line of credit .
Firstly available bank balance have to be utilize to finish line of credit so that they can save interest cost per month ,.
Not they have assets left are IRA 160000, Bank balance 4000 , Automobile 9000 , Total 173000
Now we have to talk with helen regarding monthly expenses if they still choose to live in their home , and if the social security income i.e 1900 and additional return on available funds i.e. 173000 is sufficine to live in home and then it is good . else need to look for shifting jim in nurcing home .
They have 1900 per month income and they have to lioquidate IRA , and automobile so by that way they will have funds of 173000/- on which they earn income from investment in govt secutires which are very safer and easily liquidatable
Not helen can shift at his son house.