Right now, we are using my mom's assets for her care (Home health care)...
What are they looking back at specifically? When money runs out, then what? She is in her own house and we have done the life estate converting it 8 years ago to both daughters. Any insight is appreciated!
now reading this it’s actually 5 years from applying for Medicaid- which would never work at this point due to others using moms money for themselves. Now I have this link of information to try once again to put a halt on them draining her account for their personal use.
thank you!!
LSS mom will have no $ to pay a penny on her home once on Medicaid
Your mom’s monthly income info is reported to Medicaid as part of her application along with other financial details as part of the 5 yr (for most states) lookback. Almost all that monthly income will be a copay to the NH from day 1 of her filing for LTC Medicaid. All mom gets to retain is a smallish personal needs allowance/ PNA which is designed to be used to pay for incidentals @ the NH not covered by Medicaid, like haircuts and clothing replacement. PNA varies by State & most are $50-60 a mo. Some southern states are $35. So because of the copay, all property costs on that house still in moms name - whether in a LE, or a Trust, or transfers via after death Lady Bird Deed or just old school title in her name - will need for someone else to pay all property costs for however long moms is in the NH then for a period of time after death to deal with whatever probate filing / LE filing / MERP attempts etc done. I’d allow for a full year & 1/2 after death to settle the situation.
LSS part 2. Who in your family is going to pay all costs on moms house - possibly for years - & do this without any concern financially?
Right now mom is living in her home; mom has her income and whatever assets / savings to be able to use to pay property costs: taxes, insurance, utilities, maintenance, repairs, etc. Mom may even have an house repair emergency fund. But to be eligible for LTC Medicaid for most States programs, the maximum amount of assets is $2,000.
If you & Sis want to inherit the house via the LE, you & Sis need to be able to have the purse to be able to 50/50 property costs. If Sis won’t pay her share, then you will have to cover her 50%. Again, due to Medicaid copay, mom has no $. LE cannot be changed as to Sis’s share of ownership, so I hope you sisters have a good even relationship or you have a large purse and a very good sense of humor.
Taxes cannot be ignored, they have got to be paid. Homeowners policy may be struck as mom is no longer full time resident so y’all will need to get a vacant dwelling policy. Should the property be rented, rent is income for mom which might change her Medicaid #’s for eligibility.
If you are thinking on renting the property, personally I would not attempt to DIY your moms LTC Medicaid application but get a CELA level of elder law attorney to shepherd your moms Medicaid application.
I’ve been on this forum a long time. Keeping the house sounds all wonderful & Family tends to be all gung ho for about 6-8 months. Usually till prop taxes and an event happens at the house - hailstorm or tree falls or a kid/grandkid uses it for a party shack. It will be all on the POA to pay & do what’s needed from now till beyond the grave on the house that all legally eventually benefit equally from. You know your family best & if this scenario is apt to happen.
Dealing with an in-a-NH parent empty home is a lot like dealing with a 2nd home. For most of us, having a 2nd home, isn’t really feasible.
Perhaps look at the costs to maintain your moms place and you & Sis start to set aside $ for this now, for that eventuality. Good luck.
In general terms, the 5-year look back is about looking for and finding any effort to "hide," "protect" or otherwise disperse assets that do NOT comply with Medicaid's rules so your mom can "more quickly" qualify for Medicare long term care coverage. Examples of things that might likely trip the 5-year look rules: "gifting money, large sums to others," not $25 birthday money for a grandkid, but large amounts $1K and more; retitling valuable assets, such as putting adult children's names on the house title; creating false loans, where funds are "loaned" to another without any legal documentation and/or liens filed; creating joint or other bank accounts and moving large sums to those accounts; large cash withdrawals/repeated over $1K without any receipts of how the cash was spent.
If you are spending her funds now, have been for years MAKE sure to have receipts for everything. Best to NOT pay much at all via cash. Expenditures via check, credit card, on-line payment options (PayPal, Venmo, etc.) better as there are searchable records of how the funds were spend and to whom the funds went. Under the table, cash transactions for aides and other things can be a trip wire.
If you think she will need Medicaid long term care coverage, do NOT wait until she has totally spend down. If you can find a high quality Medicare AND Medicaid qualified nursing home nearby -- a few to check out -- go visit now. If she is 9 to 12 months out from spending down funds to meet your state's asset limit (may be around $2K before the next monthly social security or any other retirement benefit arrives) try to get her into a facility as a private pay resident. Nursing homes (NH) like it -- it is a sweetener -- to getting them into the better high quality nursing homes!
Once she is about to reach the spend down asset limit in your state the NH will help you apply for Medicaid for her and/or her elder care attorney (if one has been engaged) can help with the application. There is a lot of paperwork to gather and file, going back 5 years (bank statement, tax filings, investment and retirement account information, any pre paid funeral expense contracts, on and on.)
We found it much more helpful to have set all my mom's accounts to be on-line where I had access so I could download all this paperwork as needed. Hope you have a durable financial and medical power of attorney (POA) document and NOT springing type that requires her to not have competency for you to act on her behalf. The POA we had give me the ability to do many things from selling items to other things such as liquidating my mom's IRA account (those funds have to be spend down too, 401K if there are funds in those type of accounts).
Honestly, it took about 8 months of work with an attorney step by step to get my mom in a high quality nursing home, to spend down and to get all the paperwork in place for her to apply for Medicaid long term care coverage. Thankfully, she had few if any assets to liquidate (no home to sell).
Also, when entering the NH there is lots of paperwork to sign. Have her attorney advise you on what to sign or not. There are lots of "trick questions" in these 100+ page documents to get to as her adult child to "agree to pay yourself, if she does NOT qualify for Medicaid" or to "take custody of her, if she does NOT qualify for Medicaid." This is a contract, once signed no do over.
Asset retention & LTC Medicaid can happen. But the family and potential heirs have got to, GOT TO, have the $ to front whatever costs / expenses those assets of their elderly parent(s) pose over time. As they don’t come with an expiration date, this could be years….. The POA, as they have the required fiduciary duty, has to pay all costs on house, land, autos or things go delinquent with interest and fees attached. If POA has siblings who won’t participate in share of costs or upkeep on property, they are oh so screwed. Those siblings standing legally (for terms of will, LE, etc) does not change whether they pay their share of property taxes, etc. For the OP, her & her sibling will have to pay all the costs on that house in an LE for an indeterminate period of time. They cannot get lending on it either so if something significant costly happened, that is out of their purses as mom has zero $ once mom is in a NH on LTC Medicaid.
Plus Estate Recovery is going to make an attempt in some way as it’s required. Things like this need to be taken into consideration before blithely going along with your parents wish to continue to keep their homestead. Asset retention can happen but won’t be easy imo. You need to have the wallet, a pretty good sense of humor and don’t mind risk. And really good neighbors by the parents home!
Medicaid is the only institution where the law does not apply to them.
This only applies if the former spouse basically comes into a windfall of money and there is a clause in the divorce decree in which states that one party willing to forgo alimony may at a future time reopen their divorce agreement for alimony negotiation. This is what I did when I got divorced from my second husband. So if he hit the lottery, I could hit him up.
People now marry with something called a post-nuptual agreement. This means both parties legally agree that if they divorce they get what's agreed upon and never come after more.
A couple may divorce. What has been agreed upon in their legal divorce decree is what the law recognizes. A ex-spouse does not have to pay for your medical costs or anything else that was not agreed upon in their divorce decree. Medicaid is not allowed to make their own divorce laws.
My first divorce had a stipulation that neither of us could reopen negotiations on the original settlement. Neither one of us had any money and we both agreed. The documents are in Spanish because I did it in Mexico, but I trust the translator.
If you already took care of business eight years ago, the real estate property is now a Medicaid-exempt asset.
This would not be the reason why your mother isn't on Community Medicaid which pays for homecare (it's different than LTC Medicaid).
The reason would be she is over income. If lump sum assets (not money coming in every month) is how she pays for homecare, you can start spending that money down. If her home that she resides in needs repair that is a Medicaid-exempt deduction. If her car needs something (a person may own one vehicle on Medicaid) that is exempt too. These are legal ways to reduce a bank account. The living expenses for her, the taxes, the homeowner's insurance, etc...
If her monthly income is too high she will not be eligible for Community Medicaid until her bank account is reduced. Then Medicaid will expect a portion of her monthly income to be paid towards the homecare services and she will be left with a certain amount for living expenses.
What may happen is if she cannot meet her living expenses in her house, she'll have to move. Or someone will have to pay the difference.
Investigate your State's laws for indigent support and care.
Most attorneys will do a free one hour consultation and that should be enough to explain the MC lookback and how your states laws work.
The one thing I wish I'd known 5 years ago was how in-depth the lookback investigation would be. My lawyer told me it could vary based on the caseworker assigned to the case, and mine was exhaustively thorough. I had been paying for some of my mom's expenses with my own money and reimbursing myself from her account; as a result they determined she had "given" me $18,500, which translates to a penalty period of 39 days (meaning once eligibility is granted, actual payment from the State won't kick in for 5-6 weeks).
I also had to provide invoices (not just proof of payment) for all of her homecare services over the past 5 years, all bank statements, proof we had exhausted all other potential avenues of financial support (e.g., VA support because my dad was a veteran), and piles and piles of other paperwork. Overall the process has taken about 6 months from the time I contacted the lawyer to the time the State will start funding her homecare services.
In CT the mechanism for that is that the State pays the homecare agency directly, at a negotiated rate that is usually less than the private-pay rate. Shockingly to me, most agencies pass on this cut to their caregivers, so these wonderful people who have been taking such amazing care of my mom for years are now going to be making $1-2 less per hour. There are ways to make this up privately that are best left undocumented (this was actually suggested to me by the State caseworker).
Again, this will all vary by state but I hope this at least gives you an idea of what you might need to be prepared for. Best of luck to you and your mom!
My MIL had to come and live with us because of her diagnosis of vascular dementia. She agreed to pay rent so I stayed home as her caregiver to cook, clean, and take care of her ADL since I had not returned back to work. My dh is her poa and i am second poa of her medical health and financial benefits. We have only used her finances for what was needed in her daily living and rent. She paid her rent on her own as long as she could but started to miss bills then moved in with us after things took a turn for the worst. Is this a penalty for using her funds. Will this have to be paid back? She only lived with us for one year then it became too much for me to handle. She is in the later stages now. We moved her into a memory care facility which is very expensive, and her funds will only last for maybe up to two years. Should I go ahead and apply for her Medicaid now? Is it too soon? She moved in on 3/6/23.
The government won't allow an individual to dump their assets into family hands in order for them to qualify for aid. They will take a hard look at where every dime went in the last 5 years. They don't allow birthday or Christmas presents, vacations or loans/gifts to family members, but do allow expenditures on the care and well being of the one applying for medicaid. You can prepay funeral cost, you can purchase a new car for the applicant to be transported in, and a family member can be paid to be caretaker of the applicant. The applicant will be penalized for every dollar spent outside the "approved" expenditure and that will delay the time in which the applicant will become an qualified to be a Medicaid recipient. If the applicant owns a home while in a facility paid for by Medicaid then, Medicaid will go after the home, after the applicant dies, to "pay back the medicaid expenditures". So even though Medicaid does not Count a primary home or vehicle in the $120K, they will go after the home later to recoup the expenses. Talk to an elder care attorney around the age of 50-55 to prepare for the retirement years.
Most States LTC Medicaid still have it at $2,000 in nonexempt assets.
cwillie has provided a good link below. Thank you, cwillie.
For-my mom , the caseworker was doing the application. My mom passed the day before our scheduled appointment..
They will pay attention to expenses or bills paid out of the account such as insurance policies, expenses paid by debit or check that are more than a couple hundred dollars. For example, if you paid yourself each week for something - they will ask you about that.
The Medicaid application will ask if she owns her home (which she probably still does under the life estate...if it's revokeable..meaning she owns it until death and could change her mind at any time before death). You would say 'yes' she owns home (they don't count her home value against her or a car), that she intends to return to her home (if you asked her, that's what her answer would more than likely be). There will also be a MERP form in the application that says Medicaid can try to recover the funds they spent on her care while she was alive from the estate.
The estate really will only her leftovers that are not covered by beneficiary pass-on. A bank account with survivorship beneficiary passes at death and is not part of the estate (what would go to probate). The house would pass to daughters at death and not part of estate. Certain life policies are the same. Only leftovers that do not designate beneficiary will pass to the estate for splitting with debts and heirs.
If there happened to be a car, for example, and there is no right of survivorship on the title, that car may very well be the only thing in the estate for possible recovery. You could check with Dept of Motor Vehicles in your state to see if there is a form to reissue title with designation of survivorship and that would keep car out of probate/closing estate as well....if she is mentally sound to sign legal documents.
You can also visit an elder atty now to find out what assets of mom's would be involved in the Medicaid application process. They know rules for your state.