My mother will soon need a nursing home. She has lived with me 20 years never owned anything but has saved 30,000 in her bank account. I have never charged her rent. She has medicare but now I need to apply for medicad which she will qualify but I am wondering if medicad will take that money if she needs a nursing home?
Relatives who move into your home should pay you. Rent, room and board, caregiving services -- whatever is applicable. There should be a written contract spelling out what each side is providing/paying.
Many elders cannot afford to pay the going market rate. It is perfectly acceptable to charge them far less and to keep it within a range they can afford. But if you charge them nothing, then what you are providing is considered a gift. You will have no basis for charging retroactively when it is time to apply for Medicaid, or to charge the estate. Charge as-you-go, or forget it.
There is very seldom money left for an inheritance. You definitely can't count on it. In this case, your mother will need to spend all her money on her own care before she will be eligible for public help.
Instead of or in addition to paying you rent, your mom could have been using her money for fun extras instead of saving it. She could have taken you on a nice vacation each year. Or she could have gone herself on a singles cruise! :)
She saved her money, and many would consider that wise. She now has enough to buy herself a new wardrobe, including extra shoes, pay ahead on magazine subscriptions, buy a deluxe wheelchair if she needs that, pay in advance for a funeral, etc. and then use the rest to pay for her own nursing home care. There won't be enough to last even a year in a nursing home, so she doesn't get the benefit of selecting a place that only accepts Medicaid after a year or more of private-pay.
So what has anyone really gained by Mom not paying you rent all these years? Maybe the satisfaction of paying her own way in a nursing home for a very few months before Medicaid is needed.
I'm not sure there is anything you can do to protect that savings now, but your best bet is to spend a little of it consulting an attorney who specializes in Elder Law.
Have you found a nursing home that will take medicaid after her 30,000 runs out? Normally, the social worker at a nursing home will help you in applying for your mom's medicaid. Your mom may well need a nursing home that takes medicaid which also has a memory care unit for people with Alzheimer's. How bad is her Alzheimer's right now?
She will need to spend down that $30,000 to $2,000 which will not take long in a nursing home. See the article below from this site about asset limits in applying for medicaid.
https://www.agingcare.com/articles/asset-limits-to-qualify-for-medicaid-141681.htm
To look up more information from this site about medicaid, type medicaid in the search site box in the upper right hand corner of this page and press enter on your keyboard.
Definitely money set aside for burial, etc.
Wardrobe update if needed, especially items that will need to last a long time.
Hearing aids, glasses, deluxe wheelchair, etc. These things may be covered by Medicaid, but if Mom wants something above the basic model now is the time to consider getting it.
A nice recliner. Check on room sizes where she is likely to be going first, though.
Subscriptions to magazines, crossword books, whatever she might enjoy getting in the mail regularly. Note, though, that the nursing home will have plenty of these things for communal use.
She can blow some on nice dinners out or fun at the casino.
At the search box at the top right of this page, type in SPEND DOWN and you'll find lots of posts and articles about this topic.
You really should have written up a contract at the beginning signed by both of you that she would pay you so much a month. I gather she saved up some of the $30,000 from her social security checks over 20 years. Since the average social security check is around $1,200 now, but was not 20 years ago, she must have had some money when she moved in with you.
No, you can't just take the money for yourself.
You can't just take her $30,000 out of her account because it is her's. If you have durable POA over her and thus access to her account, taking it out for yourself would be against the law. If you are her POA, then any of her money that you spend must be documented that it was spent for your mother's care because a POA cannot spend the money on themselves. If you do somehow take the $30,000 out of her account and apply for medicaid, they will look at her bank statements for the last five years, consider that money a gift and expect it to be paid back before she would qualify for medicaid. Even if the money is in a joint account with her being the primary owner, it would be considered her money that was given away. If you take out the $30,000 say tomorrow, then your mother wold be liable for gifting tax to the federal government for the amount beyond what a person is legally allowed to give someone else. If you did this and failed to report it on her tax return and medicaid discovered this gift in looking back over her bank account for five years, they would consider it a gift and your mother would probably end up owing back taxes plus penalty for not reporting it on that gift.
It sounds to me like you want to protect a possible inheritance from medicaid for yourself. Are you an only child or do you have siblings? Does your mother have a will and what does it say about her money?
BTW, what kind of business do you own?
I searched the site for an answer which you can see @
https://www.agingcare.com/search.aspx?searchterm=how+to+spend+down+for+medicaid+
With having Alzheimer's, your mom will likely need to go into a nursing home soon. So, it would be a good idea to start looking for one that will take medicaid.
I wish you the best in your journey.
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