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My dad has been in the hospital twice and 3 rehab/nursing facilities since September. He's in each 30 days and he gets shuffled to another facility. He is almost 90. He has a Stage 4 Wound on his lower back and is having periods of dementia and not wanting to eat. We have had Hospice assess him and they feel he can be rehabilitated. I was told today that he needs to be in a long-term nursing facility and that Medicaid would need to be applied.


My dad has a small amount of money in a money market and his car. He has more money than Medicaid allows and we need to figure out best way to protect that money. My brother is POA and I am Surrogate POA. We have 2 other siblings and wondered if we created a family trust made up of the 4 of us with the POA overseeing it would that protect the money or is there another way?

Prepaying funeral expenses is a legitimate spend down of his assets. A trust is not needed for the purpose of final expenses.
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Marcia7321 Dec 19, 2018
Our family was advised to put money into an irrevocable trust fund for funeral expenses.
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Marcia7321 Dec 19, 2018
But wouldn't it be foolish to give the money to the nursing home and then have to come up with money for a funeral that could legally have been retained? If this family had serious money, they would have organized the assets decades ago. Why shouldn't someone with only a little money at least see what the rules are?
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Special Needs Trust is for the disabled. It can't be gotten after the age of 65 when Medicare comes available. For my nephew, he has been disabled since birth.

At this point, setting up a trust would be hiding money. You will need to use his money for private pay spendiing him down to the 2k that Medicaid allows. Medicaid will allow a house and a car but not allow any of Dads money to upkeep either. His SS and any pension will go to his care. The 2k can only be used for his care.

There is a five year look Back. You will be asked about any stocks bonds etc. These will all need to be liquidated. You can pay funeral expenses.

I understand where you are coming from. But Dads money is not yours. Its his for his care.
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Marcia7321 Dec 19, 2018
Medicaid allowance varies by state. In NY, it's $15,000- not $2,000. TCataldo should really talk to a lawyer familiar with the law in her dad's state.
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The days of doing a “Family Trust” have passed. Special Needs Trust for dad might be possible but has to be a Medicaid compliant trust which is a legal document that imo has to be done by an NAELA or CELA level of elder law attorney. Not a Trust Officer at local bank.

Personally, If your at the point that your parent has already been in a NH and about to need to re-enter one for a permanent placement, the ability to do any sort of creative proactive asset protection for Medicaid planning has passed. That ship has sailed.

imo only exception if he actually has 100k+, might, just might, be a Medicaid compliant SNT aka special needs trust if he actually $$$. These have to be actuarial sound (IRS has tables on this) & must have the state as primary beneficiary. Read that last sentence again, please. At 90 getting it structured by a elder law atty & with tax law/CPA input to fall into actuarial tables won’t be simple as he’s outside US male death age & he dies any $ left in SNT must go to the state to repay costs of care paid for by Medicaid. The atty who oversees this will also Shepherd his Medicaid application. There is - my understanding- only 1 exemption or exclusion to the state as the required primary beneficiary rule for Medicaid compliant SNTs, and that would be if he has a legal dependent that is verifiable. Like 80 yr old mom is legal guardian of her 50 yr old schizophrenic handicapped daughter

As others mentioned, Medicaid for most states will require a 5 yr lookback at his assets in detail and a max of 2k in non exempt assets at time of application. ALSO each month he must do a copay or SOC (share of cost) of basically all his monthly income (SS, pensions) to NH.

This is super important to understand & may not have been on your radar as he may have been cycling thru hospitalization / shortterm rehab system which is covered by Medicare and whatever secondary health insurance he has.

Why? car has expenses..... insurance, tax collections annual bill, gas, maintenance. He realistically will have no-zero-nada $ to pay anything towards that car that he’s not needing but registered with the state so is his known asset. So where’s $ coming from for car?

Yes, Medicaid allows for an applicant to have a home and a car as an exempt asset. ((Note: Either must be under a value limit, for homes for most states it’s under 550k and cars under 10k, so you kinda need to exactly know if his car is under auto exempt asset limit)). BUT no matter what, due to SOC requirements elder on Medicaid will have no $ to support owning either. So if they want to keep their home or car, and family wants to respect their wishes, then family needs to assume all costs from day 1 of Medicaid till beyond their death when house &/or car become an asset of their estate. & then must be settled however your state deals with probate and Medicaid Estate Recovery. He cannot transfer car as that’s gifting and will place a transfer (of asset) penalty on his Medicaid eligibility. If car car is sold, it must be sold at FMV / BlueBook value. Unless he can establish & document why it’s less (like accident police report). If car is going to be sold, to me, he / POA is best off doing this like now so that Car sale $ gets deposited & spent down before he applies for Medicaid. If he keeps it and then 6 months from now sells it, that $ will be income / asset for Medicaid & cause eligibility issues.

I’m gonna guess that his car is older, like 10k value & that 1 money market account is a smallish emergency fund, like 30k.
If this is kinda accurate, really imho there’s not enough $ to do anything but do a spend down. Buy funeral / burial pre-need. Get extra eyeglasses, hearing aids, clothing that will hold up to NH laundry system. Spend on dental.
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A Medicaid approved trust needs to be established for five years to avoid the Medicaid look back. You might want to consult an elder care lawyer well versed in your state's Medicaid rules to see what your options are. You will need to get your dad's assets under the Medicaid limit for his state. There are approved things on which you can "spend down" the money. For example, you can pre-pay expenses related to your dad's funeral and burial.

If it truly is a little bit of money, you might be able to spend it on approved items. If you are talking about $100,000, you will most likely have to pay the costs of the nursing home before Medicaid will take over those expenses.

As I understand it, you want to organize the assets before the application is submitted. We found a number of lawyers who provided free consultations where they explained our options. You and your siblings would do well to schedule a meeting with one.
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rovana Dec 21, 2018
Well of course dad's money should be used for his care before the taxpayers are pulled into paying. Simple justice and common sense. If someone does not like Medicaid then they don't have to use it.  But remember the US does not have the kind of social welfare system Europeans have (and pay for).
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Your father’s money is for his care. Not to be protected for inheritance. Medicaid is a program for the truly . Not for those who have assets. But, you can consult an attorney specializes in elder law.
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