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Hello,

My mom is needing to spend-down $18,000 before qualifying for Medicaid. We are trying to use the money wisely, i.e. cremation/memorial service, paying off her home, property taxes, and a couple of other debts.
As of today, her best friend/boyfriend (whatever they want to call each other at any given moment) of 20 years (living separately btw) says my mom owes him around $12,000 for repairs he made for her over the years. He is asking that we pay him out of the spend-down money.
We are needing to hold on to this money as just today we have been informed that she needs to go into Hospice. Our original plans were to sign over her mobile home in exchange for the debt owed, giving him a better home to live in as well as less hassle of trying to sell her home after she's gone. Of course we know this can't be done if Medicaid comes into play.
If we choose to pay him out of the spend down money, would Medicaid accept that? There was no contractual agreement. The only proof would be a receipt and my mom's word of mouth that she said she'd pay the debt eventually.

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Brenda, I am so sorry that your Mother is ready for hospice. It is a wonderful program, but it is usually a blow to discover a loved one needs it. Hugs to you as you deal with this.

Hospice is covered by Medicare. I am not sure about the actual residential part of the costs, though. Mom may still have to pay a portion of the nursing home costs. Discuss this with the hospice administrator so you will know what Mom's costs will be, and based on how long $18,000 will last at that rate, decide on the likelihood of needing Medicaid.

I also think you might want to discuss her financial situation with an attorney who specializes in Elder Law. I'm not sure that paying off her home is a wise use of the Spend-down money, for example. The lawyer can also help you with the question of paying off the unwritten agreements for repair work. He or she can help you assess whether Mother's home would be subject to Medicaid recovery in your state.
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Give him nothing! Medicaid would see the $12K as a gift, and trigger a penalty. Giving him the mobile home would also trigger a penalty in the amount of the fair market value of the mobile home. And for my sake, spit on him too.
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If he actually did work, have him create invoices to back up the payment. Medicaid could be skeptical.
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