Mom is not on Medicaid, and probably will not have to go down that road for a couple of years or so if I sell the house now. I am thinking ahead, and the house needs to be sold now to pay for memory care, The facility has a 2 yr pay down before they accept Medicaid. I know Medicaid has a five year look back. I am in the process of fixing up her house to sell. Some painting, fix up the yard, things like that. I would like to reimburse ourselves for expenses (paint, plants, etc). Not a lot of money, and it will raise the sale price of the house and benefit her so I feel we should be able to claim out of pocket expenses for materials (no labor as me and husband will be doing the work). If I keep receipts and reimburse myself will that work, or will Medicaid frown on that? Should I be purchasing these things from her checking acct, (I am on the acct) and keeping all receipts, or just purchase myself and reimburse from her acct? I’m trying to keep myself out of trouble for the future if we have to file for Medicaid.
Mom is in memory care, I’m not telling her I’m selling her house, and she wants to go home. I am dpoa and this is a terrible job to have.
This, in any case is how I did it. There could then be no conceivable questions later on. It was pretty certain for us that he had enough money for his lifetime care. Nevertheless this is the safest way to go with you keeping meticulous records as you go for each month, saving your banking accounts and folders as you go so that everything has a receipt and everything has an explanation and you can set your hands on the file at once.
Too much explaining to do if you are reimbursed. Looks like money was given to you. Harder to show you used the materials in her house vs your own house. Save yourself all the trouble. Always pay with her money/credit card/debit card
Any labor you or your husband put in with the effort can also be billed and paid from her bank account because it is for her benefit.
If you run an errand for her, or have to make phone calls for her (anything from doctor's appointments, to banking, to speaking to the realtor about the house, etc...) you can charge for that if you are her POA. These are all necessary services for her and they do not have to be done for free because you're family.
Save every receipt. Keep a log of how many hours a week you're putting in on mom's behalf. Not just with the house renovating, but with phone work, shopping, errands, doctor's appointments, all of it. Then pay yourself weekly (keep records) out of her accounts.
This is what I did when I had my father's POA. I spent hundreds and hundreds of hours on the phone with banks, credit card companies, his housing, doctor's offices, all kinds of things. I had to miss hours of work handling his affairs as well.
I charged for all of it, including what wages I lost out on from my job. I kept records on all of it.
I submitted them to his Medicaid caseworker when his money was gone and was no longer on private pay in the nursing home. Along with copies of bills that he had which were also paid off.
There was no problem with my father getting on Medicaid.
If you've already paid out the money, I don't see why having receipts for the items needed (perhaps if you can take before and after pictures?) and reimbursing yourself would be too big of a deal. It shouldn't cost that much - my understanding is Medicaid looks for large money transfers (or perhaps lots of smaller ones in a short period), so these items shouldn't be too big of a problem. You can also use the receipts for the tax return, to reduce gains, so you'd have that documentation as well.
If you use a tax person, run it by them. When we moved mom's regular assets to a trust, I used an Enrolled Agent for the trust tax return (they have to pass special IRS tests, so they stay up to date with changes.) Once mom moved to MC, I had him do her taxes too, because MC (and NHs) are fully deductible AND money had to be fed in from the trust - no way I'm doing trust taxes (20+ pages of mumbo-jumbo to me!) I wanted to be sure it was done right! With all else I had to do, I didn't need the IRS knocking on my door.
Also, beware - Medicare WILL jack up her cost for the year they catch up to this, likely in 2 years. My mother only got a small share (it was a Life Estate, but sold while she was still alive, we put our "shares" back into the trust for her care.) IF her income, including the gain on the sale, exceeds ~88k, they will raise her Medicare cost for the year. It will revert back the next year, as there's only 1 time it would be sold, so income would revert back to normal.
Last item - not sure if it was because mom's condo was set up as Life Estate or not, but the EC atty told me I could sign ALL other paperwork related to the sale EXCEPT the deed. He said SHE had to sign it, notarized. Thankfully she had forgotten the condo (fixated on her previous home by then) AND the notary (she worked in the facility) only had to witness mom sign it, not that she understood it! I didn't want to awaken the memory of the condo.