Help for aging parents-in-law

Question: My parents in law are 89 and 90 yrs old and have $300,000 in assets. My father in law is a retired military officer but if he dies, our mom in law will only get around $1000 a month as a widow's pension. Someone is offering to sell them an annuity so they can be eligible for Medicaid as well as additional veteran's benefits totaling $1900 a month. They want to be able to move into an assisted living community that will cost around $5000 a month.

Do they need this annuity or is their $300,000 in savings enough? If so, how should this be invested? Right now $200,000 is invested in stocks and they have $100,000 in their checking account. Bridget, Corona, CA

Answer: Warning bells are going off. For one thing, I'm concerned that they have two-thirds of their savings in stocks at their age. For another, Medicaid planning is complicated. It's fraught with peril and that includes the proper use of annuities.

It's wonderful that you want to help them out. My advice is for you to find them professional help. For instance, you could investigate and interview fee-only certified financial planners that specialize in elderly clients. The CFP could look at their whole financial situation, evaluate the best way to pay for the move into an assisted living center, and comb through their portfolio. Another option is to look for a qualified elder law attorney. It's a growing field.

Typically, the best way to find good professional help is to tap into your network of friends, family, colleagues and acquaintances to get recommendations from people you know and respect. You can also begin to search for elder law attorneys at the website of the National Academy of Elder Law Attorneys. The main website for fee-only financial planners is the National Association of Personal Financial Advisors.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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