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My mom transferred ownership to my brother for his kids 529s accounts. She’s currently on Medicaid waiver in an assisted living. We are finding out now that the 529 may count as her assets. Does my brother have to transfer ownership back? What happens if he doesn’t? Can he get in trouble? What if he cashed out the 529s? I’m having so much trouble finding the answer to this. Can anyone help?? Thanks! I’m mostly curious because he told me to do the same thing and I don’t know what to do.

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Those are questions for a lawyer. As I said on your other posts, there are legal ways to transfer the funds without affecting Medicaid elifibility but only a lawyer can tell you if your brother did it the correct way. If your mom needs Medicaid now then it is likely going to be too late to transfer the remaining 529 account & shield it from Medicaid but that is where the lawyer also comes in. It might not be too late to do it.
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Thanks everyone!! We have consulted with an attorney but it's obviously very expensive. I'm not going to retain an attorney to find it out, so that's why I'm posting on here! Even the court appointed conservator finds it confusing and not straightforward, there are so many weird loop holes and stuff.

That's what I'm concerned about is that my brother did NOT put it on the original Medicaid form, but I don't know because I haven't seen it the application and either has the court appointed conservator, I guess I won't worry about that because it's not my mess! I can't get straight answers from him which is why I don't know all of the specifics, it's very annoying.

Thanks for the replies!
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I am a estate planner, I consult with elder attorneys, I have seen this before in Florida, and the 529 can count as an asset, but, it depends on when it was transferred. I would call your state Medicaid office and ask them directly, as each state's guidelines are a little different, As for you doing the same thing now...don't.
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Ownership of what, profits from a house sale?

Even though Mom can own a home while on Medicaid, it can't be transferred to someone else. Any proceeds from the sale go towards Moms care.

If she transferred CDs, bonds, stocks ect while on Medicaid or within the look back period, they have to be paid back. These are considered Moms assets and should have been cashed in for her care before she went on Medicaid. Not including them in her application is fraud.

I agree that brother needs to talk to Medicaid. He may not have been aware of the rules concerning Medicaid.
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lisab420 Jul 2019
My mom signed a change of ownership for the 529s. They used to be in my moms name, now they’re in my brothers name.

Im basically worried that he may have cashed them out and if he will pay the money back. And if he doesn’t how will it affect my mom? I can’t say if he put them on them original Medicaid application because I haven’t seen it.
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I would call the social worker for your mom and ask about the application specifically and then proceed from there.

I would also call the IRS and find out what the tax implications would be for transferring the account to a new owner and what happens if the money is not used by the named beneficiary for college. It would be worth knowing if you are thinking about doing it with accounts she set up for your children.
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lisab420 Jul 2019
I will definitely do this. Thank you!
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You have a problem. This snippet from elderlaw.com explains why:

"However, this power to control the assets means that the savings in a 529 account will be counted as an available asset under Medicaid rules in the event the account holder requires long-term care." You can read the rest of the article at

https://www.elderlawanswers.com/gifts-to-grandchildren-529-accounts-12043

So, it depends when your mother transferred the ownership of the 529 accounts. Less than five years and they will be included as assets in the look-back. Brother must give the money back - unless he wants to fund your mother's ALF all by himself, anyway.

It sounds as though you have quite correctly disclosed the existence of the accounts in your mother's Medicaid application, or your mother has, or her adviser has spotted it. No matter how bad-tempered bro gets about it - and he possibly will be quite grumpy if he thought he'd come up with a wizard wheeze and you've blown it - stick to your guns.

Are your brother's children in immediate need of education funding?
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lisab420 Jul 2019
It was definitely transferred less than 5 years ago, the only reason I know is I get the statements quarterly and last statement they were on there, and a statement t I received a few weeks ago it was $0 and he had texted me telling me he was going to send me paperwork to do the same for mine.

I do know my mom has a medicaid social worker. She has a court appointed conservator because my brother failed to do the inventory. And she was the one who asked about the 529. So I’m wondering if he had planned to hide all of this maybe?? Not sure if any of this was intentional or not. I just want to make sure my mom has a place to live!!
ugh. Thanks for your help. This is so stressful!
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"I guess I won't worry about that because it's not my mess!"

Make sure it stays that way -- that it isn't your mess.

Say if your brother has to pay back the 529 amounts and it's already gone...then what happens? What DOES happen to the elder who is already in AL at this point? Will your brother take her into his home? What if he refuses? Will YOU think about paying privately for the AL or taking your mother into your home?

Too many times on this board there are siblings who do this sort of thing and then skate off with no consequences.

Yes, an elder attorney isn't cheap or free, but there is so much at stake here that one needs to be consulted.
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Lisa, to be honest what is worrying me now is what your brother told your mother when he asked her to transfer the accounts. The difficulty is that she did that - she "gave" the money to him. I don't doubt it was his idea, but it was her doing and it's her Medicaid eligibility that may suffer. Showing that this originated with him could get quite unpleasant.

And when you say your brother failed to complete the inventory, it does begin to whiff a bit, doesn't it. Are you able to have a frank conversation with him and spell out to him that what he seems to have in mind is definitely not clever? You need above all to find out whether he can give it back.
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It's looking like they aren't going to get the transferred 529s back to my mom. The amount was about $25K. An elder attorney I spoke with (it was a coworker of a friend so I didn't ask a lot of questions since she was just giving me free advice and limited to what she could tell me) told me that for the Medicaid penalty, the cost of nursing home care is $8200 in Michigan, even though my mom isn't in a NH, she's still in AL and on the waiver program.

So would I take that $25,000 and divide by the $8,200 = 3.04, so around 3 months of a penalty (ie: them not paying for her care??) so my brother and I would have to come up with this money? Is that how this works? Anyone? OMG I can't wait to be done with this. My head is spinning with all of the info!
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If your brother got the money why do you have to pay for her care? He did this and should have to pay the price for his choices.
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lisab420 Jul 2019
I don't think I should HAVE to but I'm just worried I may have to, because if it's her on the streets vs me paying or having her live with me, etc.. I just feel like he is going to get away with this.. :\
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I agree with Isthisrealyreal. It's not your mess, as you wrote earlier.
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lisab420 Jul 2019
It's not, but if my mom has no place to live it IS my business ya know??? UGHHHHH
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Have you considered turning him into APS for financial exploitation of a vulnerable senior?

If he gets bailed out can he do anything else that would cost you?

Why can't she live with him?

I am sorry that you are going through this and feel you have no recourse.
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Countrymouse Jul 2019
Doesn't that depend on mother's take on what happened, though? She may staunchly insist that she gave him the money, and there was merely a misunderstanding about the account's status as an exempt asset. Which could be true, actually - but doesn't relieve him of the moral responsibility to give it back.
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Who is "they" as in "they aren't going to get the 529 transferred back"?

Your mother gave your brother $25K. She now has to have it back in preparation for her Medicaid application. What has either she or your brother got to say about it? Does she even realise that she ought not to have done this?
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lisab420 Jul 2019
They is my brother and the court appointed conservator and my mom.

My brother / mom transferred it to protect it from medicaid (my brother and mom signed a change ownership form) he said / thought that it was OK to do (according to him).

She doesn't grasp what is going on, no
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Have you spoken to the conservator yourself? I can't see that person just letting this go.
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lisab420 Jul 2019
Yes I've been in contact with her.
Apparently they're trying to work with a medicaid social worker and DHHS but she said she's not a medicaid attorney and not exactly sure about all of the laws, she said she'd refer to the social worker for all of that. It was a legal transfer though, as far as he didn't just "steal" the money.. so I don't know what can be done, legally ??
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As one first, bleedin' obvious and therefore probably far too simple step, she can explain to brother that unfortunately the 529 account is not an exempt asset for Medicaid purposes after all, the transfer was an error on mother's part, and the honourable thing to do would be to give it back because otherwise mother will incur substantial penalties.

He needs to understand that his cunning plan, if that's what it was supposed to be, has been blown out of the water and if he doesn't retrace the steps it is going to cost mother a lot of money and everyone will know about it. But - yes, she gave him the money, he didn't nick it. He may have misrepresented to her what the consequences of her gift would be, and that misrepresentation may have been unintentional - he may genuinely have believed this was a legitimate tactic. It does seem to be a common misunderstanding.
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lisab420 Jul 2019
Thank you. I hope he will. He hasn't said he won't. I'm just trying to plan for the what if. I don't trust a thing he does so I'm just planning on the worst case scenario at this point (him not returning the money) because I feel like I'm going to have to feel the brunt of this if he doesn't (me having to either pay for my mom or have her live with me.) I guess I will just need to wait this all out!
Thank you for all of your replies!
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" I feel like I'm going to have to feel the brunt of this if he doesn't (me having to either pay for my mom or have her live with me.)"

Why? Why would he get off scot-free? If he can't pay back the money, then he gets to take care of your mother in his home. She's HIS mother, too, and HE (his family) got the $25,000.

I'm scratching my head as to why you think YOU have to be the one who gets dumped on because of HIS mistake. This is an example of how sons get away with it all and a daughter is expected to pick up the pieces.
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lisab420 Jul 2019
It’s ridiculous and wrong but I mean, if he refuses am I just supposed to watch my paralyzed mother be homeless? If he won’t, I have to. What other option would we have?? It’s sad. And scary!
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https://www.savingforcollege.com/grandparents/answer/do-529-plans-count-against-medicaid-benefits

Very much dependent upon the state mom resides in.
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lisab420 Jul 2019
My mom is in Michigan and according to this it has the asset test therefore not exempt. Ugh
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Lisa, when you boil it down, if your brother were to refuse either to restore the account to your mother, or at least to make good the medicaid gap, this is what he'd be saying:

"I thought it would be okay for my mother to transfer this money to me and it wouldn't affect her, so I got her to do that. Now it turns out I got that wrong, and she's short of $8-25K. Oops! But I'm not giving it back, and that's her look-out."

So as yet, nobody has got round to explaining the problem to him and asking him to put right the error; wouldn't that be the first step? Or do you really believe he's that much of a b*st*rd that he'd leave your mother to clear up the mess?
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lisab420 Jul 2019
SO the conservator HAS explained this to him that it probably counts as an asset but no one has CONFIRMED it yet, so as of right now, he hasn't technically done anything wrong---I'm trying to prepare for the what if's and worst case, and to be honest yes I do think he's capable of doing it. He's already done XYZ over his 4 years of being conservator and guardian so at this point I wouldn't put ANYTHING past him! At this point I just need to move on from it, there isn't anything I can do any way. I'm worrying myself over nothing at this point. But you guys have been insightful and I appreciate it!
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Lisa; if your brother is your mom's guardian, then HE is responsible for her well-being just as though she was his child.

He will need to arrange for her to be cared for with her funds and whatever entitlements she has. It's ALL on his shoulders. You have every right to walk away and not get roped into giving up your life/career.

Just remember that "no" is a complete sentence. If you mom has put money into a 529 plan for your kids, just leave it as it is unless you hear differently from a certified ElderCare attorney.
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lisab420 Jul 2019
Thank you so much for the encouragement. I KNOW you are right! Yes she put 529s for my kids, part of the reason I first came on here was to find out what to do because he told me to do the same thing. Glad I didn't! I'll just wait, my kids wouldn't be using these funds if they're still around for 6+ years anyway.

Thanks again
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Maybe your brother had the 529s transferred to his name because he thought it might work, and heck, if it doesn't, sister (you) will come in and take care of Mom, regardless.

If you don't have the money for an elder attorney, then you probably don't have the money to pay $8300 for, what, 3 months? for your mother's care in an AL, right?

So what happens if you take your mother into your home? She's paralyzed, so what kind of care does she require? Do you work? Are YOU going to become the 24/7 caregiver? Do you have a job now? If so, then what happens to it? Do you have a husband, and if so what does he feel about all of this?

If your brother doesn't have the money anymore (and why doesn't he?), then he should get a loan for it. This is HIS fault. Or does he know that he can sit back and refuse, knowing that you will end up picking up all of the pieces?

Your mother made a bad error of judgment in appointing him to be the POA, didn't she?

If she goes to live with your brother, why do you think he won't take care of her?
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lisab420 Jul 2019
i have money for an elder attorney but it’s not something I want to throw money at right now, no. It wouldn’t be $8300, that’s the average cost in Michigan, her waiver pays about $2k a month and my moms social security pays the rest.

My mom has lived with me before so I know how to take care of her. She also lived with my brother for a brief time and he left her home alone constantly.

Im just going to sit back and see what happens. I can’t change anything or the outcome, either. I’m just worried about my mom
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What Barb said. I found the same website. 529's are not an exempt asset in most states. Mom could withdraw the money anytime to pay for her care.

https://www.savingforcollege.com/grandparents/answer/do-529-plans-count-against-medicaid-benefits
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Lisa, your mother has money for an elder attorney. She's got the money in your 529, for a start.

But the actual point is that this is your mother's problem, and she is the one who needs the legal advice if anybody does. Her money, her problem, not yours.

I have to agree that your brother makes a cautionary tale for anyone thinking through their POA choices right now.

Are you on reasonably good everyday speaking terms with your bro? Or has it always been a bit prickly between you?
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