<p>This was one of arabrab’s previous links, post 3397, re: 1/1/15 <a href=“Fact Sheet: Application of the Fair Labor Standards Act to Domestic Service, Final Rule | U.S. Department of Labor”>http://www.dol.gov/whd/regs/compliance/whdfsFinalRule.htm</a></p>
<p>Gotcha, Dharma (#3834). So when you tell your mom that the savings will run out sooner than expected, do you think that will change her mind?</p>
<p>I’ll join everyone else in urging you to cancel the appointment about the RM, and not get around to rescheduling it, not for a while anyway. There is no urgency to do this right now, none. She has plenty of cash to last her for a while. </p>
<p>The NY State minimum wage is on page 13 of that senator’s document, and it looks like overtime is required to be paid in NY. I didn’t see any exception for household employers. </p>
<p>If an employee is expected to provide services overnight, I believe that employee is also entitled to wagers (and any overtime) for such overnight services as well. This will also add up and increase the cost of in-home care with someone around 24/7. </p>
<p>The federal regulations go int effect in January, but New York State implemented theirs in 2011. </p>
<p>I have quickly read over three three important docs and am printing them not to bring with the lawyer at 3. The lawyer READ my cost analysis with $200/day listed as salary.I cannot fathom why she didn’t make me aware of the regulations it appears we must conform to before Jan 15. On the day of the meeting with the lawyer, my mother was still in the NS and could so much more easily be taken to AL at the Resort or reassigned a room at the NM. If we have to comply with minimum wage/overtime laws, which seems certain, the live-in caregiver arrangement must of necessity cease for lack of money. Again, if the lawyer had told me this three weeks ago I wouldn’t have gotten the caregiver and paid her employment agency his fee.</p>
<p>About the RM, if my mother chooses to go to the NH she likes we can put the house on the market immediately, pray we/she can pay her costs till the house sells (must be priced quite affordably). If she wishes AL (much nicer but she has high resistance), the annual cost is still $5,000 and may be higher if her Level of Care is assessed at higher than level 1, which is $444 a month. If she chooses AL/$5,000 a month, a RM will be inevitable down the line.</p>
<p>Why would you not be able to put the house on the market if she goes either to Nursing home or assisted living? There are some strategies that some people use to make it look like they are spending down the person’s money in order to qualify for Medicaid. Is the home residence exempt from the calculation of assets? </p>
<p>You said the ANNUAL cost is only 5K? Is that a typo?</p>
<p>Dharma – One of the reasons I suggested that you get a comfort letter from the attorney confirming that your payment arrangements on behalf of your mom conformed to federal, NY and local municipality laws and regulations is to protect you and your mom. If the attorney is unwilling to write a comfort letter, I’d be wary.</p>
<p>I’d still delay on the RM. When your mom goes into a facility (of whatever type) the reverse mortgage becomes due at that time! You have a limited period of time to sell the house, but meanwhile you’ve paid the (huge) costs of getting the RM with very little benefit.
<a href=“The Hidden Truths About Reverse Mortgages”>http://www.forbes.com/sites/carolynrosenblatt/2012/07/23/hidden-truths-about-reverse-mortgages/</a> <==Forbes is a pretty reputable site.</p>
<p>For Medicaid in NY state, the “lookback” period is 5 years. The Resources (property/assets) have to been transferred/sold for at least 5 years before an individual qualifies for the nursing home care via Medicaid. Resources is defined as cash or those assets, which can be readily converted to cash, such as bank accounts, life insurance policies, stocks, bonds, mutual fund shares and promissory notes. Resources also include property not readily converted to cash (i.e., real estate property). You can transfer property without a penalty but it is to a spouse, child under 21 or adult child who lived in the house for 2 years and provided care to the owner. The amount of cash/income they allow you to keep is very small. I don’t know if the rules are the same in every state.</p>
<p>Why is RM inevitable if she goes into AL? Why wouldn’t you simply sell it at that point?</p>
<p>I’m getting confused, too. This started with 60k plus the value of the house. And some monthly income, SS or whatever.</p>
<p>Some funds are now depleted because the aide was hired. But say, in another 4-6 weeks, there is 45k left, along with some monthly income. Wouldn’t that go to the costs of AL or NH, the house goes on the market, priced to sell? That 45k could last, say, 9 months (maybe more because she also has the monthly income.) Whenever the house sells, it adds to her pot.</p>
<p>If she is going to move to AL or NH, the RM is moot. That idea was to keep her in the house, make funds available to pay for home care after the 60k ran out. If she’s moving, she doesn’t need RM.</p>
<p>Dharma, this is my understanding of the numbers:</p>
<p>AL - $5K/mo approx.
SS income - $2K/mo</p>
<p>So the shortfall is $3K per month. </p>
<p>As I understand it, she has about $60K in savings. So that’s 20 months’ worth of AL she has in the bank. </p>
<p>Let’s even say that there will be unforeseen expenses and/or costs not included in the AL bill, because there always are. Let’s factor in things like insurance, clothing, cable, medical. Let’s bump her monthly outgo to $6K. This means her monthly shortfall would be $4K. </p>
<p>That would mean her savings would last 15 months. </p>
<p>As others have said, things can change very quickly for our aging parents. Honestly, you have no idea what her medical situation is going to be 15 months from now. Trust me on this.</p>
<p>Please don’t do the RM at this point. If you really really need to do it, you can wait AT LEAST a year to start. If you do it now, there’s a good chance that it will have been a very expensive mistake, with no benefit at all. Use up what’s already there first.</p>
<p>Even if you have to sell the house fast, for a lower price than you would if you could wait, it won’t be as much as the RM cost. You can always sell the house fast if you have to.</p>
<p>Dharmawheel, I know that it’s overwhelming to think that you just did all this work to settle your mom in her home and to research the RM. But all that work will continue for this or that or the other thing as long as she is home. Try to look ahead to AL or whatever institutional care she will be in, for which the burdens on you and future uncertainties will be a zillion times less.</p>
<p>If the the original savings lasts, say, 15 months (covering AL/NH,) at that point,she also has the funds from the sale of the house. </p>
<p>The only point to RM is to keep her in the house- and I thought you would prefer she not. So don’t facilitate the thing you don’t want. As said, you “can’t go” on the 18th. I doubt your mother will pick up the phone and reschedule on her own. Make sure the bank rep has your telephone number, so he doesn’t call her. This isn’t mean or unfair, when you feel AL/NH is a better solution.</p>
<p>Yes, don’t facilitate the thing you don’t want her to do. And even if she does end up staying at home for now, she has $60K. I forget what the monthly cost will be of that option, but the point is, she has enough to last her for a while.</p>
<p>Make a file for all the RM info you’ve gathered, and put it away. If you decide to come back to it when her savings starts to run low, all your work will still be there. The option isn’t going away; it will still be there down the road. But she doesn’t need the RM money NOW!!! </p>
<p>You want to keep your options open as much as possible. The $60K in cash gives you some flexibility at this point, whereas doing RM now will severely limit your flexibility down the road. There is absolutely zero good reason to do it now, and lots of good reasons not to. Don’t paint yourself into a corner before you have to.</p>
<p>jym626, yes, that was a typo. $5,000/mo.</p>
<p>Yes, thanks for slowing me down about the RM. I am overanxious that she have “plenty of cash” because the costs are so high. But I can see now to “get a grip.”</p>
<p>The prominent point in this affair is now whether (according to the links I printed out, thank you) the caregiver will be subject to minimum wage/overtime/vacation/holidays 24/7. That is totally out of the question and totally unaffordable. If this is the case, she has to leave 12/31 and my mother will have to go somewhere. I just spoke with the lawyer’s secretary and had her write a note to the lawyer of four points we must discuss, this being the most prominent one.</p>
<p>The lawyer emphasized to me that the purpose of this meeting was to obtain a “Promissary note” to protect half the value of the house from it being taken by Medicaid. Since Medicaid requires a “spend down,” now I am confused…if we sell the house, and my mother has the cash result, won’t she then be expected to pay full pay at AL or NS until she has depleted her assets to $14,050? MTnest cited the Medicaid 5 year “lookback” via which they look at what earnings you have had over the last five years, and Medicaid takes that.</p>
<p>Understanding the paperwork burdens that will fall to me, in light of my mother’s strong aversion to moving out of her house, the best thing that can happen this afternoon is that the lawyer confirm that the caregiver’s wage $200/day is within the law (I am highly skeptical of this now), the caregiver stays with my mother until she spends down all her assets (which means taking on the detestable RM) and my mother goes to a NH with enough assets to cover the costs of maintaining the house until it is sold (oil, taxes), if Medicaid will allow this. If we need “money in the bank” to cover house costs, she will have to go into the NH before she has spent down to Medicaid level, and for a few months pay full cost for NH while the house is on the market. </p>
<p>I am slipping into the lawyer’s office first to show her the updated cost-comparison which show a very high cost for the in-home caregiver, knowing now all the extra costs (the high workman’s comp for example). But if we have to conform to new tax laws, that cost-comparison is useless. If she wants to cite the cost-comparison to my mother (I will tell her my mother has refused to discuss it with me), I’ll leave that to her judgment. But, to reemphasize, if we must conform to new wage and overtime laws, the cost-cmparison is meaningless and AL or NH are the only two choices after 12/31.</p>
<p>LasMa, thank you in particular for putting the numbers in front of me again and doing the monthly calculations. Thank you for being so attentive and offering such good guidance.</p>
<p>Thank you LassMa. Our posts overlapped. I am going to call her bank and see what her balances are (I have her pin).We have written quite a few checks over the past few weeks. My goodness! Its nearly time to go.</p>
<p>Good luck with the lawyer, Dharma. One thing to remember – whatever your mom’s net monthly income (after allowance for taxes) is the first money to use for her care at home, in assisted living, or in a nursing home. If she has $2500/month in social security and pension income, then her other funds supplement the gap between $2500 and whatever the monthly charges turn out to be. </p>
<p>And a hint I wish I’d done: establish a separate checking account or savings account and deposit whatever is necessary each month to cover the accrued but not yet paid social security taxes (employer + employee’s share), worker’s comp, disability, and other regulatory payments. My MIL about had a heart attack when she saw how much she owed with her taxes, because all the employer/employee shares of Social Security/Medicare were due with her annual tax filing. (She filed Schedule H, for household employers.) You don’t want to end up in a situation where you don’t have enough money set aside to pay the obligations she’s already incurred.</p>
<p>.if we sell the house, and my mother has the cash result, won’t she then be expected to pay full pay at AL or NS until she has depleted her assets to $14,050?
Exactly. Since she owns the house, she is far from meeting medicaid requirement about finances. If she spends down the savings, then sells, she still has assets. If she gets an RM, in order to afford staying home, she has assets until it all dwindles. Even with the promissory note, assuming she agrees, half would still leave her with 100k to pay for AL/NH. </p>