RETIREMENT SECRETS: Baby Boomers Planning for Aging Parents

By KARL KIM

Have you ever noticed that time seems to go faster the older we get? For Baby Boomers, your parents suddenly get old and need help. It all happens so fast. That is why it is important to get your parents’ personal, financial and legal matters in order as soon as possible.

Recently, a son came in for his parents. His father could no longer walk or take care of himself. His mother was exhausted from being the caregiver.

Getting help from a home care agency had been seriously considered. But the cost was prohibitive and for Mom’s sake it was decided that it was best for Dad to go to a long-term care facility.

His parents were very conservative and humble people. They had worked hard, were frugal and saved a little bit of money. However, it was not enough to pay for Dad’s nursing home care.

So they came to see me to start the application process for Medi-Cal.

Medi-Cal looks at your income and assets to see if you qualify for benefits. For a married couple, they are allowed to have up to $121,220 in countable assets. This limit is increased if either spouse can prove that they each received $20,000 in redress payments for internment during World War II. If both received redress, they are allowed to keep another $40,000 for a total of $161,220 in countable assets.

For our clients, they were under this threshold, so they passed the asset test.

Mom and Dad’s only income was Social Security. Under the rules in this case, Mom would be able to keep all of Dad’s Social Security income.

Everything looked fine. All that was needed was to gather up the documentation that the Medi-Cal department required for the application. This includes things like the house grant deed, property tax bill, bank statements, birth certificate, Medicare card, valid California identification, Social Security card and more.

Gathering all of the documentation is usually the most difficult part of the application for the adult children. They have to go through all of their parents’ stuff. If the parent has dementia or Alzheimer’s, this may be even more tedious.

In our client’s case, they couldn’t find Mom’s Social Security card. She also didn’t have a valid form of California identification card like a driver’s license or senior ID. Medi-Cal requires this to prove residency.

The application was submitted without the Social Security card but we knew the Medi-Cal case worker would ask for it. In place of the California identification, we submitted a recent utility bill with her name on it.

Remember, we were applying for Medi-Cal for Dad. Dad had all of the documentation. It was Mom that had the issue.

The first thing that her son tried to do was to apply for a replacement card online for Mom at www.SocialSecurity.gov. He was unsuccessful. He then took her to the local Social Security office.

The clerk told them that her Social Security number was registered to a male, age 40. Keep in mind, that she had been receiving Social Security benefits for many years, which means that she had been getting a 1099 each year from Social Security as well.

Her son tells the clerk that she is not a man as the clerk can see as his mom is standing right there. The clerk asks for identification. Mom has none. The clerk refuses to issue a Social Security card without proper identification and cannot change the 40-year-old male status.

Next stop: the Department of Motor Vehicles to get her California senior identification. This gets done without a problem.

They go back to the Social Security office with the identification. The problem is resolved.

Dad was able to receive Medi-Cal benefits without any problem. But the problems came in with Mom because she was going to receive his Social Security income.

If the case had been reversed and instead of Dad needing benefits, Mom did, it could have been a lot worse.

This is the reason that Baby Boomers need to start planning for their parents as soon as possible. Things can change in a second. A parent falls and breaks a hip, a stroke or other healthcare crisis.

Working with a financial planner that has experience in dealing with long-term care, Medi-Cal, estate planning and finances, is a good first step. The time to start is now. Waiting until something happens can be an expensive mistake both in time and money.

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Karl Kim, CFP®, CLTC is the president of Retirement Planning Advisors, Inc. and a Medi-Cal specialist. He is the author of “Don’t Go Broke Paying the Nursing Home,” available on Amazon. His office is located in La Mirada. He can be reached at (714) 994-0599 or at www.RetirementCrisisPlanning.com. He has submitted over 1,000 Medi-Cal applications over the past 20 years with a 99.9% success rate. This is meant to be an educational article. Do not make any decisions solely on the information in this article. Consult your tax advisor, financial advisor or attorney before taking any action. We are not responsible for any inaccuracies or misinformation.