I get called on a not-infrequent basis about what I like to call the “five minutes after midnight” planning crisis. The caller is usually a child of an elder who has already been admitted to a nursing home, whose first words are something like “Dad's been placed in a nursing home — how do I protect the money for Mom?”

Here's a little information about the process I follow to answer the question.

Once I get some information on Mom and Dad's health and a quick outline of their assets (do they have a house? how much money is in the bank? etc.), I'll set up an appointment and send out a questionnaire and a list of documents I want Mom and the child to bring with them to our first appointment. I hope that by the end of the first appointment, I have a clear picture of the family's finances, know how legal title to the home is held, and know the couple's sources of income.

I will let Mom know that the house is safe as long as she is living in it. However, since MassHealth will put a lien on the house in order to be reimbursed for Dad's care, I usually want to see it transferred into Mom's name. Not only does this avoid the lien, but Mom may need the proceeds from the sale of the house someday to pay for assisted living or for other purposes. I will also let Mom know that she's entitled to keep $115,920 as the Community Spouse Resource Allowance, plus the family car and personal effects. Additional assets may be spent down on such things as necessary repairs to the house, prepayment of funeral arrangements, medical expenses, and legal and geriatric care management fees. The excess assets could also potentially be converted into a special type of annuity for Mom which would pass muster with MassHealth, providing her with additional income. I will also assess whether I have enough information to determine if some or all of Dad's income could be deemed to Mom, so that she has enough (according to government standards) to live on. I will also advise Mom to update her estate plan so that if she should die first, some or all the assets will go into a trust under the will for Dad's benefit, allowing the children to pay for needs not covered by MassHealth while allowing Dad to remain eligible for public benefits.

So the answer to the child's question is YES — we probably can protect much, if not all, of Mom and Dad's assets and give Mom as good a quality of life as possible.

The next question which needs to be addressed will be what are the legally appropriate steps for doing so. For that reason, I want to see Dad's Durable Power of Attorney (DPOA), because that document will tell me how much work will need to be done in order to preserve funds for Mom. It is common for a DPOA to limit transfers and gifts to other people to an amount equal to the federal gift tax exclusion limit (currently $14,000 per year per person). The DPOA might also not give Mom, if she is Dad's attorney-in-fact, the power to make gifts to herself. That may be fine in some circumstances, but it won't work if the goal is to transfer as many of the couple's assets into Mom's name as possible as quickly as possible. If the DPOA sets a limit on what can be transferred or doesn't grant the attorney-in-fact the necessary powers to transfer Dad's assets to Mom, then I am going to have to advise the attorney-in-fact that she will need to get a judge's permission to retitle the assets by means of a Petition for a Single Transaction in the Probate Court.

So, it IS possible to do after-the-last-minute planning. However, to do it successfully, you need to work with an elder law attorney who knows the laws and the procedures for doing so.