Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 13, 2019

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Someone has to pay the costs of a nursing home if your father requires one. One option is for your father to purchase long-term care insurance that will cover many nursing home costs for a specified period of time. If your father doesn’t have insurance and he has the assets to pay for a nursing home, then he has to pay those costs until his assets are depleted to a certain level. (This level includes provisions for a spouse.) When his assets are depleted, he will be eligible for government benefits to pay those costs instead.

Your father can’t avoid this spend-down requirement by giving his savings to you or by making any kind of transfer of assets at less than market value. He can’t buy a house at twice its market value, for example, in order to transfer funds to a relative. If he does transfer his savings and then needs to enter a nursing home within 5 years after the transfer, the federal government will refuse to pay nursing home costs for the period the money he gave away would have covered. For example, if his estimated nursing home costs are $3,000 per month, and he gave you $150,000, he would be ineligible for benefits for 50 months after the date he moves in the nursing home.

Some people need to enter a nursing home for a temporary period and are then able to resume a more normal life. For them the spend-down requirement can be a burden, since they have few assets left to live on after they leave the nursing home.

There may be ways your father’s savings could be invested or placed in a trust or annuity that would make it not count as income for purposes of government benefits. For example, if the money came to your father monthly in a form of payment that did not count as income for government benefits or was below the amount allowed and if your father did not have access to the full amount, he might preserve his savings in the form of monthly income and still qualify for benefits. Your father should get legal advice from a competent attorney on what is legal and what is not legal in this situation, since mistakes can have devastating results.