Maybe "troubles" is the wrong word, but after 11 years, I'm starting to wonder if we did the right thing when we set up my mom's trusts.
Back in 2015, we put $350,000 in an irrevocable trust, because my mother thought my father had wanted my sister and me to inherit their house, and she got the idea in her head that she "didn't want a nursing home to take all her money." (You can see some of my prior posts about this under the tag "estate planning.") I disagreed this on in many ways, but my biggest worry was my mother's spendthrift tendencies and lack of financial acumen, so I was very happy to have that money taken out of her control for me to invest. We also put most of her remaining money ($110k) in a revocable trust. I have been managing both of these trusts ever since, disbursing some revocable trust money when my mother's income didn't cover her needs, and transferring the dividends from the irrevocable trust to the revocable trust: the terms are that my mom gets the income during her lifetime but can't touch the principal, which goes to my sister and me after her death. At this point, my mom's total assets are about $390k, mostly in the revocable trust other than $5k in her checking account,. The irrevocable trust is worth about $735k. The income it produces for my mom has been as high as $40k per year recently, so combined with the approximately $40k in income she gets from Social Security and my dad's pension, she's not exactly poor.
So yay me for getting her finances in better shape. But I wish we had balanced the amount of money in the two trusts differently.
My mom has been showing increasing signs of dementia over the last couple of years, and pretty soon I think we'll be at a point where it's not safe for her to live alone. We've already started to have an aide visit her once a week to help make sure she eats dinner and takes her pills, because otherwise she forgets. (I might get her one of these smart pillbox thingies, but I'm not aware of any devices that put plates of cooked food on the table and encourage elderly people to eat them.) My sister goes over there several other days a week, but my mom really needs a check-in every day, even though she insists that she's totally fine and doesn't need help. But she never wants to go anywhere or do anything and tries to cancel whenever we plan dinners out or medical appointments for her. We even tried to take her on a trip she'd been wanting to do for a long time and at the last minute, she refused to go. She used to be social and was interested in gardening and crafts-- now she just sits and watches TV. (Oh, and her social media use is exactly what's described in this recent New York Magazine article: No iPad Till After Dinner, Mom.) Her physical health is not too bad, mainly because she's no longer overweight, but she is getting more and more frail and I worry she'll fall, as she lives in a place with stairs. We finally got her to a neurologist and they think she may have Alzheimer's.
Although she is very resistant to the concept, the ideal thing for my mom would be an assisted living facility. She'd get meals and medication management and be able to chat with people and do activities. She'd be safe and have access to help 24/7. But of course it's extremely expensive. This is exactly why I wanted to control her money in the first place, but I think the way we allocated the money between the trusts was not right. We put too much in the irrevocable trust, and now I feel like we could be a bit trapped. My mom's money might cover about 8 years of assisted living. She'd be 90 by then, so maybe that's fine. But that assumes she's in assisted living til she dies. If we had to reserve some money to cover memory care or nursing home care at an even more astronomical cost, she'd maybe have 4 years of assisted living. (You can imagine the big spreadsheet I made to calculate how multiple scenarios might play out!) My mom has a lot of longevity in her genes-- my grandmother also had Alzheimer's and lived into her early 90s, so it's hard to know how many years my mom has left, and what kind of shape she'll be in during those years. To me, the worst thing would be if we got my mom into assisted living and she thrived there, but then we ran out of money and had to move her somewhere else. Ironically, we'd be fine if we had a crisis and needed to put her in a nursing home tomorrow-- her money might last less than 2 years but we'd be able to go in as a private payer and then Medicaid would kick in to help pay nursing home costs. Neither Medicare nor Medicaid will pay room and board costs for assisted living.
If we had split the trust money the opposite way, or even 50/50 between the revocable and irrevocable trusts, I'd probably feel very comfortable right now, knowing we'd be able to afford home care, assisted living and nursing care as each made sense. But as it is, I'm unsure. One place that I looked at for assisted living has a 90% refundable entrance fee of about $125k, and requires people to have about $500k in assets, as it's a non-profit continuing care community where they'll never kick you out. But then the monthly fees would be at least $8,300 for a tiny studio at a level of service that includes a little assistance with meds and being reminded to go to meals and activities, but no help with bathing/grooming/going to the bathroom, which she is fine doing herself for now. We might just try applying to see if my mom's age and condition could make her someone they'd accept with slightly less cash on hand-- these places basically gamble on whether you'll die while you're still able to pay. And maybe I'm over-estimating her potential life span.
In theory, if my mom runs out of money, there might be a way to just cancel the whole irrevocable trust and use the money for her care. Or my sister and I could just help pay for the assisted living, though my sister can't really afford it after putting two not-yet-employed kids through college. The lawyer also said we shouldn't give my mom money as that would affect her Medicaid eligibility. So it's complicated. I am also very concerned for my sister's mental health, as she is the local one bearing most of the burden of day to day caregiving. Unfortunately, my mom has said a few times that what she really wants to do is move in with her. If my sister's kids manage to get jobs and move out, maybe that will be a possibility but even then, I think that would be really hard. My sister already has a lot on her plate.
Whatever happens, I keep trying to remind myself that we are way better off than most families who are dealing with aging parents with dementia. We've already done the legal stuff we need (including a health proxy and power of attorney), we have more money than most people do, and now we just have to figure out the best way to keep our mom safe and happy for whatever time she has left.
