I was working with a gentleman recently who came to my office to see me. He had been taking care of his elderly sister's money for the past several years after his sister became ill and needed skilled care.
Over the past several years, the brother had spent more than $500,000 of his sister's life savings on her nursing home expenses. The sister, who started with a life savings of almost three-quarters of a million dollars, was not down to about $200,000. And, the brother told me that the nursing home cost was increasing by about 10% from the previous year. Years ago. the sister established an estate planning program for other family members. But now that most of the funds had been depleted, the estate planning program won't have much impact on her surviving family members.
We discussed a few options that exist to try to salvage some of her sister's funds: do nothing and she will spend it all; do some transfers and hope that in five years there are still some assets that have been preserved, and a few other legal strategies. But quite frankly, much more would be protected if the estate protection program would have been enacted years ago.
The silver lining behind all of this is that the brother and his wife now have started to create a program to protect the value of their home and their savings for themselves and their children.