Bill and Betty retired in the last two years. Over the years, their land values had increased dramatically to over three million dollars and they had managed to put money into CD’s of close to five hundred thousand.

However, Bill suffered a stroke last year and Betty had been taking care of him for the first six months.

As anyone knows, it was not only Bill who lost his ability to enjoy life and do the things he wanted to do – it was even more so for Betty. Betty had to be at Bill’s beck and call every minute of every day and couldn’t leave him alone except when one of the children could keep an eye on him. As they were not geographically close to their parents, the children could only help on a very limited basis.

Finally, Betty decided that Bill needed to be in a facility for long-term care as she could no longer assist him in dressing, toileting, bathing, etc.

The average cost of care per North Dakotan receiving care is now up to $239.00 per day. As with any average, this number is made up of people who pay less and people who pay more – sometimes a lot more. The average, however, is now eighty-seven thousand dollars a year per person.

Bill and Betty always assumed the money they had set aside self-insured them for long-term care costs. After all, five hundred thousand was a kingly sum.

When they evaluated Bill for care, his costs of care were $480.00 a day (some three hundred dollars less than the top costs in the state) or about $175,000 a year.

Betty assumed if she took care of Bill at home for as long as she physically could, Bill would not be in the home for very long – and she was right. Bill died after only thirteen months in the facility and it only cost $187,000 of the five hundred thousand dollars in savings.

The problem came shortly after Bill died. Betty, in her efforts to keep Bill at home and care for him herself ended up with many muscle and bone injuries due to the heavy lifting of Bill during his stay at home.

At the age of seventy-four, these injuries didn’t heal and eventually turned arthritic for Betty. Only four years after Bill’s death, Betty herself could no longer stay in her own home due to the care she provided for Bill. She couldn’t get in and out of the family tub for showers, she couldn’t go down steps without assistance and, unlike with Bill, there was not another body there to assist her in her difficulties.

Betty’s family found it was too difficult and dangerous for Betty to stay at home and they were unwilling to have a family member there full-time. After all, the children had families and jobs of their own.

Betty entered an assisted living facility and the costs were much less than Bill at only five thousand dollars per month. Betty than started using the remaining $313,000 in savings to meet her costs of care as well as the rents from the farm. Again, everyone assumed this was a huge amount of money, but Betty continued to live and continued to degenerate from her injuries over time.

With increasing costs for care due to her degeneration, Betty’s reserves of cash ran out in four and a half years. After this period of time, quarters started being sold to pay for her costs of care and the three million dollar estate started going down in value.

Solutions:

This is one of those ‘shoulda, coulda, woulda’ situations where hindsight is twenty-twenty.

Had Bill and Betty prepared properly, the family farm would still be intact. As it is, if Betty continues to live year after year, and more and more of the family farm goes each year.

Bill and Betty had options to prepare for their possible costs of care: Self-Insure, depend on welfare, buy long-term care insurance or reposition assets to cover care.

Because they chose to self-insure, Betty tried everything within her power to take care of Bill at home and preserve their assets. In doing so, as it is in about sixty percent of the cases, the spouse taking care of the care-needed spouse became a care-needed individual herself.

Had they used another option, they would have gotten better help for Bill while he was still alive because ‘they were insured for it’. By seeking better and quicker help for Bill, Betty possibly wouldn’t have become disabled herself.

There are policies designed today where you can get more than your initial money back if you die or if you need long-term care of two to three times the value of the CD (less any claims paid) or if you just merely want all of your money back because you have a better idea for the money.

If banks were to offer long-term care for depositing CD money with them with a guarantee of money back – if you’d like it back – or a death benefit higher than your deposit (plus interest) would ever amount to, in lieu of giving you .04% interest, people would line up around the block to get these CD’s.

Because Bill and Betty had CD’s and didn’t want to cash them in when they needed care, they will continue to shrink their estate for as long as Betty lives.