Transcript
Speaker: Everyone dreams about living an uncommon life, but how we define that dream is very different for each of us. And for most, it's a lifelong pursuit. Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
Speaker: A life worth celebrating and savoring. Please welcome your hosts, Brian Dewhurst and Philip Ramsey.
Speaker: All right, welcome to the show. Evan Jackson, we are so thankful that you took some time to be with us. Thanks for having me. Absolutely. So I can't wait to just get into this as I always do. But this is a caveat I found out about Evan through one of my older, I'd say old bosses that I had at Pharmaceutical Land. And this guy was a rock star. His name is Jimmy G. Shout out to you, buddy.
Speaker: He gave me Evan's contact information because Evan helped him so much. And the way that he helped him was he actually was in need of some help and assistance from his father at the time was going into assisted living. And so he reached out to all his friends and asked for the best lawyer out there to help him with that process. Ended up spending a considerable amount of money to do that. And at the end, that person that everyone recommended didn't really help him.
Speaker: And so he found Evan's team at Iowa Senior Planning and for a fraction of the cost that he paid for the lawyer, helped him leaps and bounds more than that lawyer did. And so Jimmy G wanted to introduce us so we had lunch and immediately hit it off. We both have long hair. We had man crushes immediately. And so I can't wait to jump into the story. Welcome to the show, brother. Here we are.
Speaker: All right, cool. Thanks for having me. Good to be here. This is Brian and I'm wearing a wig so that I feel like I fit in. So we're glad you're here too, Brian. It's working for you.
Speaker: So let's go back. So how did Iowa Senior Planning start? This is going to be a little bit different show than we normally have. This is going to give our listeners a tool to be in the back burner. Even if you don't have parents right now that are dealing with the senior living space, I want to just put this in an earmark and a plug for Evan. His business will still be around when we are thinking about this. And I want everybody to remember Evan Jackson at Iowa Senior Planning.
Speaker: to go to run to because this guy is going places and he has a huge operation going on and he's gonna help a lot of people so how did you get into this space in the first place alright so back in like twenty twelve or so i was in chiropractic college.
Speaker: About halfway through the curriculum or so, I found out that I had broken my wrist playing football in college. About eight surgeries later, I found out that I couldn't really be a chiropractor all that well. You don't want to go see the one -handed guy to get you all fixed up. A friend of mine who was in law school had made friends with this other guy who was also in law school. He was from Utah and he was co -owner of Utah Senior Planning.
Speaker: I need come up to drink law school here in Des Moines to get his license so that he could go back to Utah practice and help out with that business while he was here he was sort of doing what we're doing now and that is helping people out with Medicaid and you know through a friend of a friend he said hey I know this guy Evan he's got a great medical background knows a little bit about finances and they sort of put the company on me and I've been growing it ever since.
Speaker: Love it. So how do you help people? Like, how did you help my boy, Jimmy G? How to help him. So, um, pretty much sat down with him, went over what was going on, figure out what the situation is, you know, we're looking to get the nursing home paid for. And that's like, you know, six grand a month. And where he was, it was like eight grand a month, I think. So she only made a couple thousand bucks a month and had nothing really in her savings. So that was his mother that you helped him, not his father. Okay.
Speaker: So she was in the nursing home, was running out of money and the only way to pay for it was Medicaid. So we sat down and I talked him through how to get Medicaid, what the basic steps were, what the rules are, and then helped him fill out the paperwork, submitted it all, and got her approved in a pretty short time. So yeah, that's basically what we do.
Speaker: Is it always medicaid pretty much all the time so there's there's like specific rules where i can't go into talking about legal stuff too much but here in iowa if i stick to just medicaid i'm not breaking any rules i'm not stepping on anybody's toes i'll put you in jail today going out so let's go to jail for you because of the man question that's the only reason.
Speaker: That's great. Well, no, this is a huge epidemic in our country. And that's why we wanted to have Evan on because, uh, you know, we meet with lots of people and they have, it's just so, there's so many rules. There's so many changes taking place and we just advocate, you've got to get somebody to help you with this. So you're not alone. And it's a very emotional process.
Speaker: So can you walk our listeners through just the emotional side of it? You know what I mean? Yeah, sure. The emotional aspect is huge because that can really affect your decision -making. And oftentimes, you're dealing with someone's entire life savings and they work their entire life. Suddenly, you're in a nursing home and it's going to cost you $6 ,000 a month. And on top of that, someone you love, hopefully someone you love is in a nursing home,
Speaker: for some reason, poor health, poor mental health, so it becomes this very stressful time where a lot of people lose a lot of sleep and there's a lot of bad information that floats around. So people just taking action trying to get this stuff fixed and using bad information to take those actions ends up with even more stress and an even bigger problem. So yeah, the emotional aspect is
Speaker: is huge and I think one of the first things I try to do is get a background when I sit down with a client, what's going on medically speaking, which is where my medical background comes into play. It's really helpful to know kind of what they've got going on and what they're going through and just to know medically speaking what I'm looking at because oftentimes it can be a situation of we have to make a financial decision but it kind of has to be based on how long we think this person might live. So the medical background is very helpful there.
Speaker: Totally. What's the average stay and average amount that you're seeing for this nursing home, assisted living, all that stuff? Could you talk through that? Sure. Average length of time. Once someone's admitted into a nursing home, it's usually two years before they've passed away because they're not there because they're healthy. Assisted living can totally range.
Speaker: Usually how it all starts is someone goes to the hospital for maybe the first time with the fall and they've broken something or they got pneumonia during the winter or something happens and usually that starts the nursing home slide. So some families if someone gets healthy enough else try out assisted living it doesn't always work.
Speaker: But sometimes you can stay there for a couple years, but eventually we age, we decline, and we end up in this nursing home setting. And I would say, I don't know, the youngest people I've seen of the elderly population, I've seen them go in probably the youngest is 66. But it's really a lot about genetics, pure luck. A lot of factors play into that. And I've seen people who have made it to 98 before they had to go into a nursing home or even assisted living.
Speaker: So average like that, my great grandpa was in a nursing home for 20 years. That takes a toll on the old wallet. Yeah. He actually had a farm up in Northwest Iowa. Just, uh, I don't remember how many acres it was. I think 80, but, uh, they sold the farm, all the, uh, all that lands, you know, 6 ,000 an acre times 80, all that money's gone. It all went to the nursing home over the course of 20 years, which is one of the reasons I got into this in the first place, just because I had a personal connection to the issue, um, and on top of needing a job. So, um,
Speaker: Yeah, it's, it is emotional because that's, you know, for, for my family, that was, that was his farm. That was his legacy. Exactly. It was this whole thing trying to protect it. And then his wife got dementia. She had to go to the nursing home. He didn't want to leave her. So he went with her and you know, 20 years later, all the money's gone and he's been on Medicaid for ever. And he actually just passed away at like 99 years old and 11 months, almost hit a hundred.
Speaker: So yeah. So let me tell you, so average amount, let's talk about that quickly that you're seeing for one of these homes and system. Yeah. So the state says it is $5 ,741. And I don't have that memorized. I'm looking at it right now. I pull it up. I appreciate that. That's amazing. So that's, that's what is what the state says.
Speaker: But average, I mean, it says six grand a month tentatively, uh, just because your room rate can be like about 200 a day. It can be as low as 185, sometimes even cheaper in smaller towns. Um, but I usually assume about 6 ,000 a month just because you throw in prescriptions, uh, ancillary things like say depends or, you know, you need extra clothes and stuff like that. It usually ends up being about 6 ,000 a month. Could be more, could be less, but in the, oh, go ahead.
Speaker: No, this is good. What's the, like, let's talk about the eligibility requirements to be on Medicaid because a lot of people are like, well, my parents are getting close to that point. Is there a way that I can be, they can gift me the money and I'm like, don't do it. So maybe like some misconceptions about it, but let's talk about eligibility requirements. Sure thing. So for a single person to be on Medicaid,
Speaker: There's three basic rules. Number one, they want you to be over the age of 65 or disabled. And if you aren't 65, maybe you have a parent that's say 62 and something happens, they need to be getting a full on level of care. Like I've had someone get in a car accident and they were still working. So applying for something like social security disability, that becomes a new factor. Like you have to get disability before you can get Medicaid because they aren't 65. So first rule, be over 65 or disabled.
Speaker: Rule number two, they have an income limitation. And for this year, it's $2 ,250. So if they make more than $22 .50 per month gross, so before any deductions or withholdings or anything like that, if you are over $22 .50, you make too much and you need something called a Miller Trust is what it's most commonly known as, but it's got a few other names like medical assistance, income trust, or qualified something or other income trust. It's got names, but Miller Trust is the most common.
Speaker: So all that does is say it's a legal document that has to be drafted by an attorney. And this is where I'll probably go to jail just for even saying the word Miller trust. But it is a, it's basically just a way to jump that hurdle of I make a little too much money, but obviously I don't make six or $7 ,000 a month. I can't just privately pay forever. So it kind of says, I'm going to play by the same rules as everybody else in that each month.
Speaker: my income will come to me and I will pay out to the nursing home for the most part. There's a formula for that we could get into later, but essentially you're gonna give up most of your income to the nursing home. And the Miller Trust just says, we're gonna do that just like anybody who makes less than 22 .50 a month. Third rule is an asset limit. So a single person should have less than $2 ,000 in accountable assets. So that would be stuff like your bank accounts,
Speaker: like your financial products, like an annuity, or sometimes whole life insurance or universal life, anything with a cash value, any financial products you have like that. 401ks, IRAs, those can count most of the time we do because the people we're helping are over the age of 65. So because they have the ability to pull that money, yeah, pull off of those without incurring some sort of penalty or having to declare a hardship, they count that as an asset.
Speaker: You have to have less than $2 ,000. Yeah. Less than two. Basically like you have to have nothing. Yeah. You have to kind of flirt with bankruptcy, like really low. And if you're even a penny over, they'll tell you to come back next month, you know, try again later. So it's, you're walking a fine line and.
Speaker: those being the countable assets the exempt assets would be a house in a car so everybody on medicaid can have one house one car house can't be worth more than slightly over half million i can't remember exactly how much but it's like five hundred fourteen thousand dollars if it's worth more than that then you have an issue but around here we don't really run into that in fact i've never run into it but it's still a factor.
Speaker: The car, same thing. There is no rule about how much it can be worth. So occasionally someone will come in with say a Corvette and like a 1990 Buick of some kind and the Corvette is exempt. You know, it could be worth $80 ,000 and the Buick is the thing that puts them over because it's worth 2 ,100 bucks.
Speaker: Because they have two. Yeah, they have two. So they always exempt your most expensive vehicle and your house because they can't take away your mode of transportation and they can't make you homeless if you ever leave the nursing home. So one thing, one big thing we should talk about, if you go into a nursing home, they will exempt the house. But if nobody's living in it, they can count it as an asset if you say, I'm never going to go back home. But you always want to be going back home. That always needs to be your intention. Write it on a napkin and say, I intend to go home when I'm done here.
Speaker: And they will let the house be exempt. It still causes problems because suddenly you still have taxes and utilities to pay. It's Iowa. Hides can freeze if you don't keep the heat on, but if all your money goes to the nursing home, that's where we run into issues. Sure. I get that. Yeah. Okay.
Speaker: And then any fourth rule or is those three? There's kind of a fourth rule. So that's just for a single person for married couples. It's, it's different. The asset limit is the low end is 26 ,000. It's like the minimum amount a spouse can keep who is living at home. Like say, just your mom went into the nursing home and dad's still living at home. That can keep up to 24 ,000. Like he should get that. If you have less than that, you're eligible for Medicaid. You don't have to spend any money or do any work.
Speaker: Um, and the spouse in the nursing home can have up to 2000 like that single person limit. So grand total of 26 ,000. Yeah. Once you get over those numbers, it's unevenly. Yeah. So let's say you had 30 grand. You say to 30 ,000, you go into the nursing home. They say, all right, the spouse at home gets to keep 24 ,000.
Speaker: The spouse in the nursing home needs to be under 2 ,000, so you take that remaining 6 ,000, that difference, and you spend it below the $2 ,000 limit. So for them to be on Medicaid, they have to spend $4 ,000 and one penny for them to be eligible. And that's where some people are like, well, why don't you just give it to the next generation? That is not a good strategy. Tell me why. I'll tell you why. That is because they have a penalty.
Speaker: So for every dollar you give away, you're penalized and it's based on the average cost of care in the state, which I think is like $212 a day.
Speaker: We call it a divestment penalty divisor. So essentially, for every almost $6 ,500 you give away, that equals one month you're not allowed to be on Medicaid, or $212 a day equals one day you can't be on Medicaid. So today, just before this, I met with someone who donated $400 to her church last month, and she's in the nursing home this month. When you apply for Medicaid, they always want to see, at the very least, your last three months of bank statements. So they're going to see that she just gave away $400.
Speaker: And they'll say, all right, well, 400 divided by 212 is, you know, a little over a day, you know, almost two days worth of a penalty. So when we get her on Medicaid, they'll say, you're approved, except for these two days. And that's not a big one. But, you know, I run into people who it could be a huge one. Yeah, huge amounts of money. Yeah. Yep. And that's really just hurting the nursing home at that because you don't have the money you gave it away.
Speaker: nursing home sits there not getting paid and Medicaid's not going to pay them because it's a penalty. So that's who it hurts the most. Wow. So tell me this, do you think there's an epidemic in this country about this type of like, as the baby boomers get older, is there an epidemic that everyone's going to these homes? How do you protect yourself? How do you prepare for that? Uh, well, most of the time there is something called a look back period.
Speaker: where if you were to give away assets, say you gave away $100 ,000, if you did that within the last five years,
Speaker: and you are needing Medicaid now, they can penalize you for that. But anything outside the five years, it's safe. So I've met someone who put all of their stuff, they have all this farmland basically, they put it into a trust, an irrevocable trust. So if it's a revocable trust, it means you can get access to the assets, you can revoke the thing, take all the farmland back, sell it and pay for Medicaid or for nursing home care. Look back, yep.
Speaker: Yeah, so a lot of people will go meet with like an elder law attorney, which is smart. Go talk to them and they'll set up one of these trusts and see if it's appropriate to set up a trust and if they've got substantial assets, just put them in there. That's the best way to prepare yourself if you've got a lot of assets. On the other hand, there's a middle ground of like, say, $100 ,000 or so where you could just as easily do a different kind of spend down.
Speaker: Depending on the situation but if i could tell everybody around sixty to just go meet with their attorney and see if it's appropriate to set up an irrevocable trust i would be fantastic because i would have a job and i can just hang out all day yeah for sure tell us about the medic medicaid spend on options.
Speaker: Yeah. So let's say, you know, we, we have, I don't know, pick it a hundred thousand bucks. We have to get rid of after you hit the $48 ,000 mark that we were kind of a callback to when we were going over. Oh, you've got 30 ,000. Let's say they have a hundred. If you're over 48, they divide it 50 50. So if you got a hundred grand, 50 of it is safe. So half the other 50 has to be spent below 2000. So you got to spend 48 grand. What do you spend $48 ,000 on before you can have Medicaid?
Speaker: rather than give it all to the nursing home, you could pay off any bills. In some cases, that could just be the mortgage and you're done and your spouse still has a place to live or your house can sit there and you don't have a mortgage payment to worry about anymore, which will be good if you're in the nursing home and your monthly income goes to them. So bills are always a top priority. If I can get rid of those credit cards, old medical bills, mortgages, stuff like that. You can also upgrade a vehicle. That's a pretty popular one. So you have three junkers sitting in the driveway.
Speaker: one of those is exempt, but the other two count against you and it's probably just enough to cause a problem. So we can just trade all of them in, throw some extra cash at it and throw another 20 grand and get yourself a nice car. Something that's easy for you to get in and out of in your old age. If you've got that problem, or if your loved one is in the nursing home and suddenly they're in a wheelchair, you can even buy like a wheelchair accessible van and have that be your most expensive. Exactly. I've had somebody, one time somebody bought an $80 ,000 truck and that's still exempt.
Speaker: Okay yeah that's a spend on option you can have a nice car other things obviously personal needs items weather that's close because if you go to the nursing home and you're gonna change sizes because of you know you're having a hard time eating or you're really sedentary all the sudden changing size happens a lot in the nursing home so a new wardrobe always a good move.
Speaker: Any other personal needs items like toiletries just prepay for like more expensive shampoo if you like that sort of thing. Just get a lot of shampoo. Yeah, tons of shampoo, cool clothes, anything you want. Entertainment options. Those are always a fun one for me.
Speaker: So you're sitting there, you're in a nursing home, you got nothing to do besides watch their TV and whatever cable options they have for you. Buying a laptop is an awesome idea. I love it when people do that. If they're tech savvy enough, buy them like an iPad. Buy them a tablet of some kind or even a Nook. Have something to read, have something to do. Because if it's for their entertainment, that's considered a personal lead on them. That is exempt. I had somebody buy a guitar one time. That was exempt. Yeah, 12 string. He was really good.
Speaker: And a gaming computer, someone who is very into gaming, they're like, well, I'm sitting here. I'm going to use this nursing home Wi -Fi and play Call of Duty because that's what they like to do. Yeah. That is hilarious. Yeah. So there's a lot of cool stuff you can spend it on. One of the bigger ones is funeral plans.
Speaker: prepaying those, that's like the first thing everybody goes to. They go to the hospital, they go to the nursing home and somebody, some nurse or a social worker or a family friend will say, oh, you got to prepay your funeral and they'll run off and do it. Not always done the right way though. The key word when it comes to funeral plans is irrevocable, kind of like those trusts. If it's irrevocable, it's an asset, you cash out your funeral plan and pay for nursing home care or just make it irrevocable. But point is, it's a great way to do it. If you expect an expensive burial,
Speaker: You can do those for yourself, your spouse, your children, spouses of your children, brothers, sisters, and parents. All of them. You can do it all. Anyone under the definition of immediate family here in Iowa. I'm pretty sure that's almost everywhere in the country nowadays.
Speaker: Prepaying for funeral goods is allowed and once they're on medicaid they're like care gets paid for like yeah And no matter where they want to go like talk to me through that Yeah, so you can once you're on medicaid you pay something called client participation It's called different stuff in different states, but it's pretty much your share of the cost of care
Speaker: it's what you can afford so it's your gross monthly income minus your health insurance premium so like your medicare your supplement your drug plan whatever you got you pay for those you keep fifty bucks a month for a personal needs allowance here in iowa and the rest of it whatever is left over goes to either the nursing home or your spouse who is living at home. And once you're on you treat you know just contribute that to wherever you go as long as i have an open medicaid bed and the nursing home that you choose feels they can take care of you they'll take you.
Speaker: and medicaid will just picks up the rest of the tab after you contribute your share so interesting to me only because like whenever someone of our clients deals with this we always like you gotta talk to a professional somebody that's in this daily so they know the ins and outs the ups and downs so it's important for us you know to be amazing what we do but also know and we can't be amazing at everything so get with an expert and talk through that.
Speaker: So you also run the business, right? That's your deal. Like you are running a business, Iowa senior planning. Tell me how you got into that. That's interesting to me. Yeah. So, um, you know, when I was finishing up the whole chiropractor thing, I finished up my last half with the cast on my arm for like a year and a half or two years. And I started helping out with.
Speaker: building the business talking to nursing homes sort of building a building a client base and we go in there and say look you know i know you have bad debt which is when someone's in the nursing home that they're paying to care for but they're not getting paid so they just rack up huge amounts of money that is owed to the nursing home.
Speaker: So we go in and say, I think I can help you fix that because I can help get these people on Medicaid, these people who do not have a source of payment. And they'll say, all right, we'll give you a shot. So I kind of run around the building, meet with all the people who aren't on Medicaid who need it and help them get on. And usually I go back to their administrator and say, here's what I did.
Speaker: these sources of debt are now their income for you. Yeah, that's huge. So that's kind of how we started. We started with one building in Des Moines and then I built it to two more in Davenport and then it is kind of built up to like 20 or so in the last five years is about how long we've been in business. I feel like they should be like welcoming you with open arms, right? Yeah, you would think it can be tough though because you walk in
Speaker: to a nursing home and they assume you want money, which kind of true, but I also want to help and not necessarily get the nursing homes money, but, um, it's a win -win -win. Yeah, it is a win. And it's your long hair. That's just kind of hard. Yeah. You look a little bit young, long hair. They're like, this guy's weird. I want him out of my office.
Speaker: But our listeners got to get a visual of this guy looks like Thor. Oh, you're going to see it. We're going to put it on the phone. We'll get that. We'll get the bio picture up. Sure. You do the bio. You can take the Thor picture too, if you need. Well, so I haven't the thing that I, cause we've encountered this a few times, you know, where people are kind of, I would just say misinformed and they're trying to explore, you know, some basic information.
Speaker: Five -year look back is a long time. What's that threshold like of starting to think about that? Is it like a dollar amount? Is it a health thing? It's probably a concert of both. I usually tell people to look at their family history because that's kind of a good indicator.
Speaker: if everybody ends up being 95 in your family, you should probably plan to be 95 and do what you can to protect your assets. Start looking around 55 because I think after 55, if you wanted to go the long -term care insurance route, it gets pretty dang expensive.
Speaker: Yeah, and when you say when you mean protect your assets you mean like giving them away like let's use your grandfather For example, what could he have done different? Let's talk I would have sent him to an attorney and had him do an irrevocable trust and give the land into that trust Yes, it's realistically. Nobody would have ever wanted to sell it. You know, no, you got capital gains. You guys know that stuff If you never sell it you're not gonna be paying capital gains. So your grandpa's legacy
Speaker: Right. So it just sits there and that would have been a much smarter move than selling it and spending it all at a nursing home until it's gone. What do you, what do you think about long -term care insurance? I'd love to hear your take on that. It can be good. It could be a useful tool. Let's say, you know, you're not calling our baby ugly on this. Like we truly want to hear your input. Yeah, it can, it can be good. Um, I've run into people who get say a monthly benefit of like 1500 a month. That really isn't enough.
Speaker: Totally. To pay for anything. Maybe in an assisted living where the average cost is $3 ,500 a month. That might be enough if you're already bringing in $2 ,000 from your pensions in retirement and whatnot. That might be okay. But a lot of times if nursing home care is $6 ,000 a month and you're getting anything less than $4 ,000, you're not doing yourself any favors because you still end up on Medicaid because you're $500 short per month and eventually your money's going to run out unless you're super wealthy.
Speaker: When someone asks me about it, I usually say either go big or go home because the cost of care is not going to go down. You may as well have something that's going to pay a lot and get it while you're young if you can. Would you say that the average person will be on Medicaid at some point? I would say a lot.
Speaker: at six grand a month, you'd have to be pretty wealthy for you to not run out of money or pass away very quickly before you run out. But the way things are going, I mean, medical science has come a very long way. We could keep people alive forever. And it's, it's kind of sad really, because some people are just in a nursing home almost functioning.
Speaker: don't want to keep living. Yeah, they don't want to be around anymore. But you know, we can't let them go. It's you have to try what you can you can best you can do is a do not resuscitate and hope to pass away. It's otherwise you're just sitting in a nursing home, you're tired, your quality of life is gone. Everything hurts. It's, you know, it's hard to see. And
Speaker: I don't know. It's tough. There's about 30 ,000 Medicaid beds in Iowa. So it's a small chunk of the population, but the elderly population is, well, heck, I don't even know how many people over the age of 65 we have, but it's probably a static. It's going that direction. Yeah, it's going that direction. It's going to be a lot. Iowa's an aging population. A lot of young people leave, old people stay. They're already here.
Speaker: So yeah, it could be a pretty big problem in the future, which is why so many nursing homes are being built all over the place. Very true. What's the common mistakes people make when they're starting to do all this stuff? Yeah, that's half my job is fixing stuff. I do more crisis planning than pre -planning. They come to me when they've been in the nursing home for a month and they don't know what to do.
Speaker: And if we're lucky, they haven't made any of these mistakes. But the big one is don't give away money. Just don't give it to a charity. Don't give it to your children. The only time you could give money away is to a disabled child. If you have a child who is collecting SSDI, they're considered disabled. You can give them any amount of assets without incurring a penalty. So signing over property or putting your child's name on the deed to your house, adding them
Speaker: you know, onto even life insurance can be a problem. You just have to be very careful or putting them on your car. It's stuff like that, giving it away, putting someone's name who didn't pay for this asset, like a house or a car, putting their name on it is essentially giving them half of whatever equity you've built up in it. So that's the big one.
Speaker: Um, like if I wanted to, like, let's say I was, I knew I was going to go into nursing home. I needed to dump some money. I buy life insurance. I don't know. I might not be that old. Like that's not a good decision because then that half of the life insurance that person didn't pay. Yeah.
Speaker: It's not ideal to just go and buy a bunch of life insurance because it's still an asset if you can cash it out. And if you can, then it's kind of a penalty because you just gave something away to a life insurance company. And that's what they would have preferred you spent on yourself or nursing home care. A cool thing about life insurance, just a fun side note, a lot of people will just start cashing in life insurance policies because that's what say a social worker told them to do. You cash it in, you go buy a funeral plan or assign your policy to a funeral home.
Speaker: But that doesn't really make any sense. If you've got like a hundred thousand dollar life insurance policy, all of that going to a funeral home is not going to, I mean, it's definitely going to pay for the funeral and whatever's left over after a funeral would go to the state because they have a program called estate recovery or after you've passed away, the state send you a letter saying, sorry for your loss, but we've paid X amount of dollars over the last 10 years and we'd like to collect whatever's left. So that could be that life insurance money. It could be your house, your car, um, whatever is left in your estate. Okay.
Speaker: Small policy is not really worth your time. If you have a $3 ,000 policy with $2 ,500 of cash value built up, no one's going to want to buy that. It's not really a good asset for them. But if you have a good example, someone with a $150 ,000 policy.
Speaker: It was only worth probably, I think, $20 ,000 in cash. So they could cash it out, but you just lost that death benefit by doing so. So instead of that, you can sell it to, say, your children. They can come in, buy it for $20 ,000, exactly what it's worth in cash value, because that's all the value it has as an asset, according to the state. So have all the kids round up $20 ,000, buy this policy for mom or dad, and then they become the owner, they pay the premium, and when they pass away, you still get all that money.
Speaker: So selling life insurance is it's a big pet peeve when someone's cash something and they could have easily benefited from. Totally. Once you do that, there ain't no going back. Right. Whoopsies. Yeah. Yeah.
Speaker: So could you also borrow against the loan from loan against that policy? Yep. If it makes sense. If you've got, so like I said, with client participation, you pay all that to the nursing home each month. You really get to keep $50 a month and like two grand in the bank. If you're a single person, if the premium is higher than that, you're going to lose money until it's gone. And then the policy is going to lapse anyway. But if you have a spouse, they can keep up the premium payments and rather than
Speaker: and sell it or cash it in, you could take out a loan, say it's worth 25 grand, it's $100 ,000 policy, you can take out a loan for $24 ,000 and drop its value down to $1 ,000, take that 24 grand and spend it on something you need, or more likely purchase something called a Medicaid compliant annuity, where you take whatever amount you need to spend down, buy an annuity that is irrevocable and non -assignable and a whole bunch of other fancy words.
Speaker: Essentially, you put 24 grand in, you can't get it out until the term is up, and it'll pay out monthly to your spouse who is living at home. So you spent $24 ,000, got on Medicaid, and then at the end of, we'll say, a year, they got all $24 ,000 back plus a little interest, and then they can just, every month, pay off that loan they took out on life insurance. So it's just channeling the money the proper way.
Speaker: That's uncommon. I like that. Yeah. That one's the least known method, I think, and most valuable when it comes to spouses. A spousal case. If you have $100 ,000 and you have to spend 50, you could spend it on bills, but if they've already paid off their house, they don't have any credit card debt, what do you want to spend 50 grand on? Most people don't want to spend it on anything. They just want the money. Yeah. Totally.
Speaker: buy one of these annuities it'll pay out to them and they'll have it all back at the end of the term which could be as little as six months a year it's totally up to them how long it runs.
Speaker: Well, thanks for walking through that, man. Yeah. The annuity stuff is very interesting. Um, that's the one thing I'd want everybody to just keep in mind. You can also do that with retirement funds. So rather than save you got like an IRA out there for 150 grand, you could cash it in, but then taxes, not ID. Uh, if it's, if you've got a spouse at home, you could just roll it over into an annuity that pays out to your spouse at home. As long as it belongs to the spouse. Good example, I've got somebody in
Speaker: working with now, $130 ,000 IRA. It belongs to the wife who is currently at home and the husband's assets are all just in the bank, non -qualified funds. So we need to just spend about $180 ,000 at the end of the day. $130 ,000 of it is going to be this annuity. She's just going to roll it over into a Medicaid compliant annuity, roll that IRA over. So she just spent 130 grand of the 180 she was supposed to, quote unquote, spend.
Speaker: So at the end of like, you know, six years, she's going to get it all back. She'll be taxed on it, but it's better than cash and then spending it. Totally. Well, I appreciate your time in this one and your expertise because this is something that when you need it, you got to have a trusted person to go to and you'd be the perfect one. So can't thank you enough for being on the Uncommon Life podcast. How would our listeners reach out to you if they have any questions or
Speaker: A good way to do it, just go on the website. It's iaseniorplanning .com or you can always just give us a call. We've got a business line. It's 515 -344 -4284. And yeah, I'll be happy to answer anybody's questions. Help out however I can. We don't charge anything to talk to us, so don't freak out about that. Yeah, that's good to say, you know.
Speaker: Yeah. Well, Evan, this is just such a heavy topic and, you know, what the demographics the way they are. Unfortunately, it's just going to be get more and more common. Unfortunately, you know, people got to go down this path. And so I just really appreciate and respect you the way you conduct your business and where you're really helping people out with such a, yeah, it's just an emotionally heavy topic. And so thank you for all that you're doing. Yeah. Thank you for all that you guys do.
Speaker: Well, let's keep in contact. And then again, if anybody ever wants to reach out to Evan, obviously we have his contact information too. So please feel free to do that. Thanks for listening to the Uncommon Life Project and we hope you have a great day. Bye. Thanks everybody. That's all for this episode of the Uncommon Life Project brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth .com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.
