Can I hide money from Medicaid, so mom can leave her kids an inheritance?

5 Comments

Q: My mother is worried about spending all her money on long-term care and not being able to leave an inheritance to her children. Is there any way to "hide" money from Medicaid?

A: "Hiding" assets by not reporting them on the Medicaid application is illegal and considered fraud against the state, with both civil and criminal penalties. Thus, I would not recommend it! However, there are a number of perfectly legal techniques for preserving and protecting your mother's assets so that they pass to you, even if she were on the Medicaid program.

For example, she can make an outright gift to you and then wait five years to apply for Medicaid. Once this "five-year lookback period" has passed, the gift is ignored for Medicaid eligibility purposes, no matter how large the gift. A combination of a present gift to you of a certain amount of money and a purchase of a Medicaid annuity is a great way of protecting at least one-half of her assets so that they pass to you. A Medicaid annuity is a special type of annuity that is irrevocable, non-transferable, immediate, and fixed to equal monthly payments. With the right type of annuity, it is non-countable as an asset for Medicaid purposes, and the purchase is not considered a gift that might otherwise cause a disqualification period.

Another way your mother can protect assets for an inheritance is by taking advantage of your state's Long-Term Care Partnership Program (not all states have this available, however). By purchasing, say, $200,000 of coverage, she can set aside up to $200,000, and if her nursing home expenses exceed the insurance coverage, Medicaid will pay for her care and the state cannot touch this protected amount. Upon your mother's death, it will pass to you. To see which states currently offer this Partnership program, see the LTC Partnership website.

K. Gabriel Heiser is an attorney with over 25 years of experience in elder law and estate planning. He is the author of "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets," an annually updated practical guide for the layperson.

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5 Comments

I can't believe that you would even ask such a thing online! In case you are not aware...... Itis against the law to hide money from Medicaid. When you sign to accecpt assistance from the state/government, you agree to certain terms. 1- is that any money over the limits for that particular state must be told to the state, and is cause for disqualifacation/dismissal from the program. If you deliberately hide money you could be required to pay the money back, and face possible fraud charges,and sentenced to jail. Now,.... are you sure you want to ask that question again? You need to figure this out on your own.
I work for an elderlaw attorney in Florida. I would not use a Medicaid annuity as if she has to go into a nursing home before the 5 years then all of those monthly income funds would go to the nursing home and upon her death then Medicaid would get all of those funds. There are Personal Services Contracts and Rental Real estate that you can use. Never ever try to do this all yourself. It is well worth the one month's fee of a nursing home to have an attorney figure all of this out for you. An attorney can save you about 72,0000.00 dollars a year in her care. Best seek out a certified Elderlaw attorney now so you can plan ahead. You also need to thing about how things are titled in the event she passes (will it go through probate?) We consider everything now, during and after in our practice. Good luck.
I am sorry, I have to ask you if it is truly you wanting to hide the money left over so you can have an inheritance. My apologies if I am wrong, but I have the same problem except it is my sisters who are hiding Moms money from Medicaid and they admittely want it for themselves when mom passes. This is just a sore issue with me. I am currently seeking an attorney but my own funds are limited. I am POA and neither sister will tell me the whereabouts of moms money.