Pretend that you (or your parents) are 70 years-old with four adult children, two married with their own children (grandchildren). One of your children is on what appears to be permanent disability and receiving government assistance. You are proud of your accomplishments, now retired and living in security with a paid up home and over a million dollars in retirement funds and investments. But you (or one of your parents) has been diagnosed with early Alzheimers. The prognosis is bad and one day, if you live that long, a nursing home will most likely be needed. The idea of living in your home for the rest of your life might be financially possible (minimum costs will exceed $10,000/month most likely for 24/7 care) but the drain on the well spouse might be overwhelming. You have been informed that 40% of the caretaker spouses die before the ill spouse. You have been informed that medicare does not cover a nursing home after 90 days and that the cost could drain the estate to the tune of $6000/month for life. But you are further informed that there is a program known as medicaid (medi-Cal in California) that, if you qualify for, will pay most of these costs. But to qualify, spouses cannot have more that $110,000 or so in assets other than their home (that's exempt most of the time) and your estate will have to pay it all back after the surviving spouse dies. An attorney tells you that you can transfer all of your non-exempt assets to a specialirrevocable trust where you can still retain the right to change the beneficiaries and change trustees but cannot use personally your principal. He can further promise you that if you transfer your assets to this trust, you can qualify for medi-Cal for certain after 30 months from this transfer, and the assets will not be subject to recovery by medi-cal ever. Notwithstanding the disadvantages of this trust (no immediate access any more to your principal), are there ethical and moral considerations in pursuing this course of action?

Is there an amount of money that you have accumulated that would change your answer to the previous question?

Is this discussion similar to a discussion on the ethics of maximizing deductions for our income taxes?

Does it matter that you have a disabled child (or brother/sister) who might need your assets more than a fully capable child?