Lawyer promise to protect MIL's assets--too good to be true?

[Rylito]

My elderly widowed MIL needs assistance with things like cooking and bathing, so she recently hired a few family friends with caregiving experience to assist her for 6.5 hours a day, 7 days a week. She's very sharp mentally but has a host of medical issues, so we know that some type of assisted living/long-term care facility arrangement might be in her future. 

I have a free legal service at work and made an appointment to talk to a lawyer to discuss what options were available to protect her assets in the event she moves to an assisted living facility.  She doesn't have much; she's a renter, has an after-tax savings account of under $100k, and her income comes from SS, a small pension, a 401(k), and an IRA.  I estimate her total annual income from all these sources to be around $40K, which means she makes too much to qualify for MediCal.  Her monthly outgoing expenses including the out of pocket caregiving are now around $5K/month.

During the consultation the lawyer made a claim which I found a bit hard to believe, which was that if I hired him he could create a plan to entirely protect her after tax savings account, rather than her needing to spend it down before going in to LTC.  I know my MIL is very concerned about leaving some inheritance for my low-income SILs, so it would be a huge relief to her to not have to blow through her savings paying for LTC, but I'm a bit suspicious that this can be accomplished--I expected there might be a way to shelter a little of her savings, but not all of it. 

Anyone here have experience with this and can confirm if the lawyer's claim is valid, or should I run not walk away from this guy?

[SailingOnASmallSailboat]

Smells fishy to me. Can he provide references of people for whom he has successfully done this, and you can talk to them?

[Rylito]

Good questions, I will contact him to ask for some references.  I did confirm he's a member of the bar in good standing.

[MrThatsDifferent]

Wait, her income is $40k/yr, and her expenses are $60k/yr? Is that correct? That means she needs an extra $20k/yr. The lawyer isn’t a magician, she’ll need to take $20k/yr, giving her 5 years to live like this before something gives. She’s going to need to get those expenses down, maybe it’s time to move in with family?

[Sandi_k]

He'll tie up all her liquid assets in a high-fee annuity or "whole life life insurance." And the commission will go to him. With a 10% surrender charge.

Hard pass.

[Sibley]

Wait, her income is $40k/yr, and her expenses are $60k/yr? Is that correct? That means she needs an extra $20k/yr. The lawyer isn’t a magician, she’ll need to take $20k/yr, giving her 5 years to live like this before something gives. She’s going to need to get those expenses down, maybe it’s time to move in with family?

Yeah, bigger fish to fry here. OP, never mind the slimy lawyer (and yes, that's a scam of some sort, don't fall for it). If your MIL needs help on a daily basis, then she can't live alone. She doesn't have the assets to pay for that amount of care, long term. She needs to get into an assisted living place NOW, while she still has money, so that when the money runs out they'll switch to accepting the Medicaid payment.

[SimpleCycle]

There are legal ways to shelter assets from spend down, but Medicaid has a 5 year look back on the disposition of assets, so you're way past that point if she's already needing substantial care.  I would dump the current lawyer.

I would not assume she is not eligible for MediCal.  She may qualify for spend down and In Home Supportive Services.  I'm not in California so I am not sure how the two programs work together, but you should contact her local county office to find out more.  https://www.dhcs.ca.gov/services/medi-cal/Pages/CountyOffices.aspx

You also may want to consult an elder care attorney for help with navigating the options.  A good lawyer can be invaluable in figuring this stuff out, and will know what asset protection options are available and are not available in any given situation.