The Costco Connection - September 2017

SUZE ORMAN

Suze Orman is an Emmy Award–winning TV host,

New York Times best-selling author and motivational speaker. She can be contacted at suzeorman.com.

Orman will answer selected questions in this column.

She regrets that unpublished questions cannot be answered individually.

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suze@costco.com

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S EA N LE E D AVI ES

Q My husband and I are in our ;;s. We are both in reasonably good heath and own our own home, mortgage-free, and have some savings. In the event that either of us becomes incapacitated and needs to go into a nursing home, I know it will wipe out our savings in a short time. How can I keep most of my assets, such as giving them to my children now, so that I can get on Medicaid. Is it too late?

J.E., Quincy, California

A If you were to transfer your assets to your children, it may make you ineligible for Medicaid for up to five years. What generally happens when someone applies for Medicaid is that the government checks to see if there have been any asset transfers within five years. This is referred to as the “look-back” period. Transfers within this period can make you ineligible for coverage.

One alternative you might want to consider is selling your home and using the proceeds to finance a move into a continuing care retirement community (CCRC). Many CCRCs offer three tiers of living: independent, assisted and nursing care (some even provide memory care); residents transition to different care when needed.

Q My husband is not working. His only income is his Social Security check. I work.

He applied for credit cards using our household income; I did not sign on any of his credit card applications. Will I be liable in case something happens to him or in case of default?

L.N., San Jose, California

A If you live in one of the nine community
property states (Arizona, California, Idaho,
Louisiana, Nevada, New Mexico, Texas, Wash-
ington and Wisconsin) you generally can be held
liable for any debt a spouse incurs. If you live in
another state, you generally will not be held lia-
ble for the debts of a spouse unless you explicitly
co-signed for the credit card or loan.

Q We sold our home several years ago and have been renting. We’re ;; and would like to either stay in Arizona or move to Colorado to be near friends and family. We’re both in good health and ;nancially sound. Our question is, what makes more ;nancial sense: Rent or buy?

M.C., Tucson, Arizona

A A purely financial answer would only take into consideration the cost of renting versus the carrying costs of owning (mortgage, property tax, insurance and maintenance). But that’s too narrow a lens to use. The right move for you is the one that makes the most emotional sense. A financially sound move that leaves you feeling edgy is in no way smart.

You say you are financially sound. I love that! If buying a home you can truly afford makes you feel even more financially secure, then it is something to consider. But it sounds like you are comfortable with renting. It gives you more flexibility to move if your circumstances change, and, hey, at your age it might be nice to not have to deal with maintenance issues. Just be sure the rent you will pay today is very affordable. Over time, rents typically rise; you want to be able to handle increases without any financial stress.

Q I’m a ;;-year-old divorced male, ;;; percent disabled Vietnam veteran. I own my own home and cars, all free and clear. All of my bills are paid in full each month. My yearly income (tax-free) is about ;;;,;;; per year, and my net worth is just north of ;;;;,;;;. All of my medical is paid for by Veterans A;airs (VA). Do I need to keep paying ;;;; per month to Social Security for Medicare? Social Security told me they felt it would be a good idea to continue paying it, just in case I might need it someday. They also told me if I dropped it and changed my mind, there would be a penalty in the cost of renewing it.

G.C., Sonoma, California

A First, thank you so much for your service. It sounds like you have been able to get the care you need through your local VA. That’s great. But I think paying ;;;; a month to be eligible for Medicare is a good “insurance” move for you. I hope this never comes to pass, but what if at some point you have a medical issue that would be better treated, or perhaps treated more promptly, if you sought care outside the VA system? Having Medicare coverage gives you the flexibility to seek other care. C