Mom had a CD for $5,000 with my name on it but p.o.d. (payable on her death.) She considered it to be my CD. Over the years I used it for collateral on loans. 3-1/2 years ago I wanted to use it for a loan again, but she said it wasn't earning hardly any interest on it, so why not just cash it in. So we did. She also had a $5,000 CD with my brother's name on it, also payable on her death. She also decided to cash his in for him. She figured it was her choice to forget about the payable on death, and cash them in for us. When she got the cds, it was probably 10 to 15 years ago. Had she not put p.o.d. on them, and just had our names on them, there wouldn't be a problem. But now she needs nursing home care. Is this going to be a problem, even though our names were on them? And if there is a penalty and she has no way to pay the penalty, then what? Is she out on the street, so to speak? I'm disabled, and my brother has no money. So we have no way to pay it back. Mom put the house in our names 10 years ago with her having a life estate. That was her only asset, other than a car valued at about $1,000. So she has no way to pay a penalty. So if no one can pay it, what happens next? Because she put the house in our names while retaining a life estate, we can't sell it till she dies. And we're broke, so have no money to pay for upkeep. Her mom lived to be 96, so we might have to hold onto it for another 9 years if she lives as long as her mom. We can't afford our own places plus hers. I live in a trailer with my disabled husband and don't want to sell my place and move into hers. When she dies, we'd sell her house (not a trailer) and then I wouldn't have my trailer to move back into. My brother has a nice double wide on its own lot and doesn't want to sell his place either. Neither of us can get a loan so we have no way to pay the cds back. Mom is 87 and can't get a loan either, for the penalty. So what happens when no one can pay the penalty??? Does that mean mom can't go into the nursing home? Is there any way around the life estate? Could she put it in my name (since I'm disabled would that exempt the transfer to just my name with no life estate) so that we could then sell it instead of waiting till she dies? This is all so confusing, she's in the hospital and they want her in the nursing home within days.
I seem to recall that there are hardship provisions that can be claimed in a Medicaid application. The NH business office may be able to assist you, or you may need to seek out an eldercare attorney who deals with Medicaid applications.
Advice here is well meaning but not all the time correct. Without the full picture no one can advise you.
However here is what I’ve observed with my Mom:
Hospitals look at it as “OK, we have treated her and taken care of whatever she came into the hospital for… so our obligation is finished. It’s the patient’s and or families problem now.”
They tried this with my Mom who is 94. She was weak and could no longer walk (in a wheelchair) so I asked them to have her evaluated for mobility and strength by Physical and Occupational Therapy (This also added three more days to her hospital stay). My argument was she could not go to home as she is now weakned for where she was prior to her injury and needed therapy to build her strength back up.
I told mom not to sign ANYTHING without me approving it and refuse discharge. However, It didn’t come to that, they evaluated her and agreed to transfer her to a Rehab Hospital. Medicare will pay for up to 100 days care (We are in California). Unfortunately for various medical reasons mom ended up using all 100 days. The Rehab Hospital also tried to discharge her and we politely refused to accept the discharge and applied for and got her on MedCal ( state assistance). She spent all almost a year there.
Do not let them discharge her. Most will try to get the family to commit to take care of her. This is not something you should jump into lightly. Have her refuse to be discharged do not allow the hospitals ‘so called’ social services talk you into discharge without confirmation that she is going to a rehabilitation hospital …or a place of need for her condition and where the money is or will be coming from.
Her financial problem is not their problem until you make theirs. They will try to put the burden on the family . However, if the family is like yours and cannot afford it financially and emotionally, there are other options. Remember, these ‘in the hospital social people’ work for the hospital and the hospital’s best interest. Your county social services may need to get into the loop too.
BUT BEFORE YOU DO ANYTHING SEE AND ELDER LAW ATTORNEY!
To me, there’s 4 different yet intertwined issues:
1. Mom gifted 2 5k CDs. If done within past 5 years (since 2012), it will show up easily both in banking & tax records, causing 10k transfer penalty. Penalty is basically a math problem: amount of item gifted divided by your states daily room& board reimbursement rate paid to NH by Medicaid. So $175 daily R&B means 57 day penalty in which Medicaid will not pay, so family will need to pay for her stay, IF the atty. cannot get penalty waived.
2. Life Estate & the “We can’t sell it till she dies” is just not true. If it’s an LE, then mom is tenant owner & you / bro are the Remaindermen. Mom still owns & can sell. BUT % of her ownership & share of $ from the sale will need to be determined by what her age is at the time of sale. IRS has actuarial tables for this in Section 7520. It is not simple and imho has to be done by a taxation pro. The elder law atty will have someone they work with to do it. Now selling property poses another gifting issue as you & bros % ownership as Remainder men can possibly also be viewed as gifting by Medicaid with a transfer penalty placed. A lot will depend on how LE was done... like revocable or irrevocable. Again something for mom to discuss with her atty.
3. Medicaid for how most states administer their program allow for the elder to continue to keep their primary residence as an exempt asset for their lifetime. Mom does NOT need to sell her home to be eligible. BUT Medicaid requires mom to do a copay of basically all her monthly income (like her SS) to the NH. Mom will have no funds to pay on any of the home costs..... like taxes, insurance, utilities, etc. Family will need to pay. Now some states allow for empty property costs to be deducted from the Medicaid tally that becomes the MERP amount after death, but it’s totally on family to track & document those costs and in detail. If mom lives for years & years, well costs will mount up and will have to be paid otherwise risk have tax sale happen or uninsured property losses. It sounds like realistically neither you or your brother can afford to take on paying moms house expenses. House can be sold.
Really once on NH Medicaid, it doesn’t matter whether house is in an LE, or a future TOD, Lady Bird Deed, or testamentary Trust, whatever the case..... If you want to have mom keep house then family will need to front all property costs from day 1 of Medicaid and then after mom dies and through whatever MERP, probate, TOD, etc paperwork clears.
4. Disabled brother - MERP recognizes the situation of disabled heirs and can waive or release a claim or lien against the estate that would be the disabled heirs. But if it’s 50/50 you & bro, then only his 50% gets waived. Unless you also can qualify for one of the many other exemptions or exclusions to MERP (like caregiver or low income exemption). Otherwise estate recovery Lien or claim can still be placed on your share. You can reduce it by doing an exemption from all those costs paid that you kept meticulous records as well as after death costs paid. Again just how to best do this is something to clearly speak with the elder law atty about.
None of this is simple, and why an atty needed.
About what happens if mom can’t pay. For both my mom & MILs application, the NHs reviewed the supporting documentation required to see IF they (NH) would even take them as a “Medicaid Pending” resident to begin with. For my mom, one document required was a notarized letter from her bank as to the disposition of any CDs, TBills or closed accounts within past 5 years. Fortunately all went into her checking account so fully accountable. But if 2 CDs had been just cashed out, I doubt mom would have been accepted as “Pending” so instead would have had to do private pay rate to live at the NH till Medicaid approved. You may find this is what will happen with your mom. If the $ is just not there, then elders can become a ward of the state, and so state takes over responsibility for moms care and her property.
Really your situation is complicated & not a DIY; pls get mom to see an atty ASAP and BEFORE she ever does a Medicaid application. Good Luck.
If neither of you can care for her in your home, perhaps you can borrow against the home she gave to you.
See an attorney who specializes in ELDER LAW and/or Medicaid. The specialty is important. They should talk to you for free and tell you what can be done.
"Son steals parents' money, leaves dad at funeral home"
he left mother in medicaid nursing home, stole both parents pensions without paying nursing homes after he put parents in different ones, and he left his father in funeral home without paying for services so taxpayers would pay final expenses. A real charmer.
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