Some Personal Advice

It is rare for a Card Player columnist to write about anything but poker in his column. What follows here is an excursion into a bit of my personal life (likely for the last time in my column). The purpose is mainly to pass on some personal experience that will undoubtedly be of interest to many readers, or you, because it may either save you a great deal of money or spare you some heartache – or both.

In 1996 I left Southern California and a job as a prop player at Hollywood Park Casino to move back to my hometown of Saginaw, Michigan, to live with my father, who had been widowed the year before when my mother passed away. He was in excellent health despite being 86 years of age, but he was a lonely man who needed the companionship only a son, his only child, could provide. For me, it was a good move, because it gave me the time to write several poker books, among other things.

Dad stayed in good health for several years, but eventually he fell victim to the same downhill slide we all take sooner or later. A couple of years ago, he was diagnosed with Parkinson's Disease, and he developed other medical problems, as well.

My dad and I had been living on the second floor of an apartment building with no elevator (my parents' home for the last quarter-century). A year ago last May, it became obvious that we were going to have to move, because my dad was soon going to be unable to go up and down stairs. What could we do? We could rent a condo, rent a house, buy a condo, or buy a house. Naturally, I wanted to be able to take care of my dad for as long as possible, make life more pleasant for him, and avoid having to pay a fortune for nursing home care. To do this, we needed a bathroom that was suitable for a handicapped person. The key here is showering. If the shower is spacious enough, you can roll a specially designed chair with wheels into it. Hardly any homes are equipped with this type of shower. It became obvious that we were going to have to buy a house so that we could do the needed modifications. Jumping ahead of my story, we eventually found a place for sale that had two closets in the bathroom that could be taken out, enabling the bathroom to be renovated. We bought the house, and wound up hiring a special contracting firm that specialized in handicapped modifications. It was expensive (the bill was 13K), but they did a terrific job.

The key decision we needed to make was whose name to put the house in. We both had to be in a position to face the possibility that at some point, I might not be able to take care of my dad, no matter how much I wanted to. I sought some legal advice, and after some false starts with "generic" lawyers, I talked to a lady who specialized in Medicare and Medicaid law. Bingo! It is her advice that I want to pass on to you. (Naturally, I am not a lawyer, and you probably don't live in my state, so you should seek legal advice from an expert if you actually have to deal with these problems.)

Medicare pays only the first 100 days of nursing home care. Unless there is protection in the form of a special type of private health insurance pertaining to long-term care, the patient then takes over paying. The cost varies with the state and the quality of the place, but typically it's 5K a month. When the patient runs out of money, he can continue to get his care funded through Medicaid, a joint state and federal program that funds health care for destitute people.

The legal advice I received from several sources was to put the house in my dad's name, and have him use up a big hunk of his bank account for the down payment, to reduce the amount of money the state could grab. Medicaid will not force you to sell the family homestead before you become eligible for state help, even if you are not living in the home. But this would have been the wrong thing for us to do. In 1995, the federal government passed the Estate Recovery Act, mandating that the states try to collect money for Medicare by attaching a lien on the home after the patient dies (unless the spouse is still living). Michigan has not applied the Estate Recovery Act yet, but I was warned that passage of legislation to do so was imminent, since nearly all other states have already done so.

I was told there was another way to reduce the amount of money the state could grab, by giving it away. As long as the total amount gifted is less each month than the average cost of nursing home care in that state, such estate reduction is perfectly legal. (If you exceed that figure, you lose a month of Medicaid eligibility.) Note that the federal restriction on gifts to 10K a year does not apply to estates of less than a million dollars, because inheritance taxes do not kick in until you get into seven figures for the net worth of an estate. (Of course, I could have my dad pay me to take care of him, but then the amount would be considered taxable income.) Obviously, I had more safety if I bought the house myself, and received a monthly gift from my dad.

There was a fly in the ointment, though. I had enough money to put up a down payment, but did not have the income on paper to get the mortgage. So, I searched for a way to get my dad's name as a co-holder on the mortgage, yet keep his name off the title to the house. I explored many avenues to do this, but busted out with mortgage brokers and credit unions. In the end, our own bank came to the rescue. Most mortgages need to be "portable," meaning that they fall within certain parameters so the bank can sell them to another financial institution. They cannot cut you a special deal on these mortgages. But, our bank kept a portion of its mortgages in a "non-portable" category. I was able to get the deal I wanted by getting a variable-rate mortgage that would be kept by our bank.

As soon as we moved into our new home, Dad had to go into a wheelchair. Last month, after three horrible months in hospitals and rehab facilities, he died. My father was in a nursing home for only a short time, so Medicare was still paying the bills. But if he had lingered on for a long time, our home would have been completely safe from being snatched by the government. And by this time, most of the money in his bank account had either been gifted to me or spent on handicapped modifications to the house.

I am going to continue to live here in my Saginaw home. It is a lovely place, a fitting legacy. I have been unable to travel, being the only assistance provider, which is why I have not been to a poker tournament since August of 2001. Now, I expect to be seeing my poker friends once again.

I know many of you are dealing with the problem of aging parents – or are getting up in years yourselves. Be brave, and confront the problems of aging before they actually arise. A good poker player looks ahead. Otherwise, you could lose the biggest pot of your life to your state government. Don't gamble with the whole ranch.