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This is the tenth article in a series by elder law attorney Richard Habiger, published exclusively in the SENIOR VOICE, which discuss changes to the Medicaid law that will have a devastating impact on many middle class families in southern Illinois.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

Mitch and Regina’s Rainy Day Fund

Mitch and Regina's Rainy Day Fund



Mitch and Regina celebrated their 60th wedding anniversary this past May.  They were married not long after Mitch returned from the south Pacific, where he won the Navy Cross.  They raised three children, a son and two daughters. They now have seven grandchildren and three great-grandchildren.  Most live in and around southern California where Mitch and Regina first lived after they were married.


Mitch and Regina moved back to southern Illinois more than 15 years ago.  They built a good life and wanted to retire where they had been born and raised. 


Regina said that Mitch felt like they never had much, but he was proud to have served a great country.  Mitch worked hard so that they were always able to pay their bills on time.  When the end of the month came around, they generally were able to set a few dollars aside for a "rainy day."


When discussing what a "rainy day" meant to her and Mitch, Regina made it clear that their "rainy day fund" was intended to be a hedge against inflation - just in case the cost of living rose more than what they would receive from social security retirement benefits.  Regina was even more emphatic that they did not set their rainy day fund up to cover medical bills.  She said the federal Medicare program was supposed to cover their medical expenses after they turned 65 and retired.


Sadly, Mitch and Regina did not realize that the Medicare program does not cover the cost of long term care.


Mitch has been failing the last few years. He was prescribed a medication for his memory. The doctor said Mitch had dementia, and that it might be Alzheimer's.  Regina had been trying to care for Mitch at home, but her health has suffered greatly.


Mitch entered a nursing home two weeks ago.  Regina has been fixated on making sure Mitch gets good care there and has not paid attention to the cost of that care.  Their daughter Barbara flew in from San Bernadino last week to help.


When Barbara discovered how quickly her mother's "rainy day fund" was being drained, she went to work trying to get her some financial help.  She quickly found out that in order to qualify for financial help, her mother would first have to spend down the "rainy day fund."  This would mean that her mother would no longer have the safety net her dad had worked so hard to put aside for his beloved wife.


Fortunately, Barbara had heard about Elder Law Attorneys in California - how they help seniors get good care without going broke.  She had friends in California whose parents had been helped by Elder Law Attorneys to qualify for Medicaid and still keep most of what they had.


So Barbara hoped that an Elder Law Attorney here in southern Illinois might be able to do the same for her mother - even though the laws in California are different.


There is good news for Regina.  She may not need to spend down her "rainy day fund" after all. By using a special technique, the Elder Law Attorney will be able to get Regina an order that will allow her to keep more than the standard "Community Spouse Asset Allowance" - in fact, a great deal more.


Unfortunately, there is also bad news.  Mitch and Regina have many grandchildren and great-grandchildren.  Like most proud grandparents, they like to give their offspring gifts. There were small gifts for graduations, weddings, births, and, yes, gifts for Christmas and other holidays. Then there was the time they helped their grandson Timmy pay for medical treatment for his wife. Before Mitch will qualify for Illinois Medicaid, Regina will need to account for all of these gifts.


But there is more. Mitch and Regina were very devoted to their church. In addition to their weekly contribution, they made a substantial donation to the church building fund. Again, Medicaid will need an accounting of these charitable donations.


In bewilderment, Barbara asks "why?"


The Elder Law Attorney explains that there is a new federal law that creates a five-year "look back" period and creates a "penalty" period for all gifts or transfers made during that period.  Moreover, the "penalty" period does not even begin until all spend down requirements have been met.


In the case of Mitch and Regina, the Elder Law Attorney will need to help Regina prove that the gifts and transfers were not made for the purpose of qualifying for Medicaid. Unfortunately, the task of doing so will be daunting given the new enforcement procedures used in Illinois.  But the Elder Law Attorney assures Regina and Barbara that while the task will be difficult, he will be able to help Mitch qualify for Medicaid - and that Regina will keep most, if not all, of her "rainy day fund."


Richard Habiger is an Elder Law Attorney. He may be reach at 618-549-4529 or