Organic Broadcaster

Paying for end-of-life care doesn’t need to jeopardize family farm

By Teresa Opheim, Renewing the Countryside

When it became clear that Connie Tjelmeland’s mother, Luetta, could no longer live alone, the family came up with a plan to provide for her end-of-life care. Their goals were to, a) make sure Luetta had the best care they could afford, and b) avoid selling her Central Iowa farmland to pay for that care.

Soon after, Connie and her husband, Mark, decided they would provide for that care on their Central Iowa farm. For her first seven years with them, Luetta could walk around the house with a walker, dress herself, and use the bathroom. For her last three years, however, she was unable to walk and needed almost total care, which Connie and her sister, Marlys, provided.

“Marlys moved back to Iowa for the summers at the time Mom moved to our house, and we shared the work during those months,” Connie explained. “My other siblings either lived a long way away or didn’t have the flexibility to offer much help beyond moral support.”

Luetta was very clear that she wanted to compensate her daughters for their efforts. She had long-term care insurance, but it didn’t cover in-home care, so she used farmland rental income and her social security payments as compensation. Connie and Marlys paid themselves $18 an hour for that care in the early years, and $60 an hour when their mother needed total care.

“Our three other sisters and brother were satisfied with letting us decide our level of compensation and adjusting it upward as Mom’s needs increased,” Connie said. “I was fortunate that there is a high level of trust among my siblings. None had financial problems, and that made it easier. For example, my brother never felt that the assets were ‘his’—they were Mom’s assets. Anything he would receive he would consider a gift.”

To free up time for caregiving, Connie and Mark ended their enterprise selling eggs to Central Iowa grocery stores and hired help for other farm work. “I did find myself with an internal struggle between wanting, on the one hand, to give back to my mom free of charge all the loving care she had given me when I was young, and, on the other hand, being paid for my time,” Connie added. “The desire to be compensated as fairly as possible always rose to the top, though, and I do not have any regrets about that. We came out short money-wise, but there were so many other factors.”

When Luetta died, the Tjelmelands had some comfort in knowing they had met both of their goals; they had done what they could for Luetta and kept the farmland in the family.

Kudos to this family:
• The family set goals and put in place a plan to achieve those goals;
• The sisters were deeply committed to their mother’s care, despite the personal cost to them;
• The siblings get along and communicate well with each other;
• The other siblings recognized the financial compensation the caregiving sisters deserved.

For the Tjelmelands, like so many farm families, the farmland itself often represents the largest asset the family owns. “More than that, it is such a meaningful asset,” said Rachel Dahl, an attorney with Hellmuth and Johnson. “The thought of liquidating or selling the family farm in order to pay for long-term care services is sometimes so intrusive and unwelcomed that people simply do not engage in planning until it is too late and certain choices are no longer available.”

So how do you prepare for end-of-life costs without losing the farm?

Start by thinking about what you even want for end-of-life care. By completing a living will or advanced healthcare directive, you can indicate a preference for avoiding aggressive (and very expensive) care in your last days, if you so choose. Discuss your end-of-life wishes with your children as well. There is a simple form available at to talk about questions like: Are you worried that you won’t get enough care, or that you will get overly aggressive care?

Also think about your risk of needing expensive care and pencil out the costs. Financial planners Sonja Bjork and Niles Austvold of Highview Advisors ask their clients questions like:
• What is your medical history?
• Does the family history show a predisposition for long life and a need for nursing home care?
• What is the extent of income you project, with inflation, for your old age?
• Do you anticipate any other income during your old age?
• What is the current daily/monthly rate for nursing homes in your area?
• What is the projected future daily/monthly rate for nursing homes in your area?

Then you can think about how you are going to pay for that care. Luetta was able to use a self-insurance strategy; see the box for different options.

Highview Advisors report that there are many misconceptions about the level of support you will get from Medicare, Medicaid and your health insurance to pay for long-term care. The rules are complicated; but briefly, here are some basics to remember.

Medicare does not pay the largest part of long-term care services or personal care—such as help with bathing or supervision, often called custodial care.

Medicare will help pay for a short stay in a skilled nursing facility, for hospice care, or for home health care if you meet the current guidelines.

Most employer-sponsored or private health insurance policies cover only the same kinds of limited services as Medicare. If they do cover long-term care, it is typically only for skilled, short-term, medically necessary care.

Medicaid does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements. “People with any amount of assets at all will find it virtually impossible to qualify for Medicaid for a nursing home stay unless they liquidate assets, which then can end the farming business,” said Gary Hachfeld, University of Minnesota Extension.

Many farm families consider gifting the farmland assets to the children so that Mom and Dad can qualify for Medicaid. “Farm families have to consider whether this strategy makes sense from a tax standpoint as carry-over basis rules apply to gifts of land, which can result in a huge tax liability for the children if they plan to sell the land in the future,” attorney Dahl explained. “In addition, because the land is held in the children’s names after the gift transfer is made, it is now their asset. This means that if a child has issues with creditors, judgments, bankruptcy or divorce, it may affect the land in a negative way.”

In addition, through something called the “look-back period,” officials will consider any gift made within five years of application when determining your eligibility for medical assistance.

Also, ponder this: The last asset to be sold, mortgaged or liquidated often is the farmland, because it is so prized. If the on-farm heir gets the farmland and the non-farm heirs get bank and investment accounts, it could be that the non-farming heir gets disinherited or gets very little if the long-term costs are high. If your very top goal is to provide some inheritance to all of your heirs, then your strategy should implement that goal, even if it means some of the farmland will have to be sold. You might not be able to meet all of your goals for the future of your farm.

It’s always important to communicate early and often about your goals and plans—it’s doubly important if the heirs are not getting financially equal shares. If you have not communicated your top goal to provide farmland for your farming heir to farm, for example, you are leaving that farming heir to justify your decisions when you are gone.

Careful and early planning will make it more likely that you can keep the farm in the family, pay for end-of-life care, and provide an inheritance to non-farming heirs. Unfortunately, sometimes, despite the best planning, a long nursing home stay or a prolonged illness may mean selling some of the farm.
My parents own Iowa farmland, but there are no longer relatives working that farm. In my mind, the best use of the farmland would be to pay for their care, if need be. As important as the farmland is for my family legacy, they are much more important.

Working through how you will pay for end-of-life care is very complicated, and that’s why you shouldn’t try to do it alone. Get professional help—it will help you avoid financial and emotional costs later on.

Teresa Opheim is a Senior Fellow at Renewing the Countryside and the Minnesota Institute for Sustainable Agriculture. This article is dedicated to Connie’s sister, Marlys Benck, who died April 12, 2017.

Additional Resources

Join the new Farm Transitions Discussion Group: or contact

Free book on farmland legacy planning:

Info on a variety of topics:

Estate planning factsheets, including end of life care:

For government info on long-term care, Medicare and Medicaid:

Talking with your family about your wishes for end of life care: and

To reach Attorney Rachel Dahl: Hellmuth & Johnson, or 952-746-2155.


From the May | June 2017 Issue

Comments are closed.