We had been working with an elder care attorney because three years ago my mom bought my niece a car, she tried to sneak and do it, but it was too obvious. We told her not to, because we knew she’d need a nursing home within 5 years. She was diagnosed with dementia just weeks after buying the car. Okay, 1st attorney told us there would be a three month penalty, to set aside money in irrevocable trust or annuity that would pay nursing home through the penalty phase. For reasons I won’t get into, we had to find a new attorney. Met with him today. He hates annuities, said she wouldn’t be penalized, and has this expensive plan that we need to follow instead. I am SOOO CONFUSED!!! ALL I want is to get my mom in a nursing home and me NOT have to pay the bill!!! Mom requires 24\7 care and is wheelchair bound, can’t even stand at all. Today, when I was trying to explain to Mom that we had to have a plan for her going in the nursing home (we’ve talked about this before) and I was telling her about the new attorney, she told me she’s not going to the nursing home because one of her caregivers promised she could come live with her and she’ll take care of her. And why didn’t I tell her NOT to buy that car in the first place? <sigh> I’m calling the caregiver now and telling her she can come take mom home today!

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How much was the check for the car?

Are there other gifting or grey areas in your mom’s 5 yr look Back?
If the car was like 30-35k, to me, this seems like a lot of commotion for a smallish penalty. Can you get a personal loan to pay back mom the $?

And really whats the reason why 1st atty is out of the picture?
To pay for an atty and then switch to another is unusual unless atty has died or recused him/herself or you filed a complaint with state bar.

You know I kinda can see the different paths each atty is taking.....
#1 - wants annuity/trust done so her $$$ is absolutely moved from mom’s assets to the trust/ annuity so no way family can ever get it. But I’d be concerned that the annuity in her name, is still her asset for reporting to Medicaid and her asset for any spend down so $ won’t be there to pay penalty; & if it’s not a Medicaid compliant annuity, it’ll have to be surrendered for Medicaid to be approved. For trusts, I think those need a full 5 years prior to be ok for Medicaid. The $ is tied to her SS# so not there to pay penalty. If this is somewhat accurate & if it’s next year she moves to NH, will the “trust” or annuity be Medicaid compliant??? Was any of this clearly discussed with you & your daughter? Are these really ok for exactly how Medicaid runs for your state without waiting 5 years???
#2 - places the penalty onto you as you (I’m assuming) sign a legally binding debt agreement that meets Medicaid standards (so it’s actuarial sound) & the $ paid each mo then becomes income for mom & added into whatever she gets for SS or other retirement. And all of this income will be mom’s copay to the NH once she goes in & applies for Medicaid. It makes sense as you got $$ from mom & no way it’s not gonna surface for penalty but this plan makes it manageable overvtime & be compliant for Medicaid. The area to be concerned about - to me - will be what happens if you don’t pay and what happens to the debt once mom dies? The 8k fee is larger than the more standard elder law / estate law fees cause this atty has to shepherd not only moms application but also dealing with you paying a monthly debt service.

If you don’t want to go #2 path & it’s cause you don’t want the debt, (due from your mom gifting to your daughter for that now pos car), imho, your mom will not be eligible for Medicaid till you private pay the # of months the transfer penalty places. Path #1 really imho needs to get to 2023 to easily work. Your mom doesn’t have to 2023...
Helpful Answer (1)
Reply to igloo572
igloo572 Aug 5, 2018
And I understand why you don’t want to pay the debt as it’s your niece who got the car (not your daughter, my bad, sorry) not you. But if you cannot get that niece to repay grannie for the full amount grannie gifted niece for the car in nieces name sitting in another state, then you - as your mom’s DPOA - has to deal with it. Everything mom falls to you to deal with.

I imagine neither you or grannie will be up for filing a police report that niece took advantage of a vulnerable adult. Police report & action make the transfer go away as $ was stolen.

Personally Im with atty #2 as to hating annuities. They to me never ever make sense for an widow or widower elder facing ma facility to ever buy. They often get touted to fearful elderly as an “allowable” or “eligible” way to keep $ away from Medicaid, (it’s allowable as it’s still your $ and not a transfer to another so gifting) that’s true, but most are NOT Medicaid compliant & if not usually the state makes them get surrendered before Medicaid will be approved. Usually the elders are clueless as to the fat fees & steep commissions paid & the costs to do a surrender imo.
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Talk to your CPA and get a good referral if the CPA doesn't have experience. Financial people know the good attys to use.
Helpful Answer (3)
Reply to surprise

I'd be hesitant to backtrack and change plans that are already in place. Just because the new lawyer has a different style and opinion doesn't mean it is better.... and they will bill by the hour for the paperwork to change something that doesn't need fixing. Maybe you need to look for someone who is willing to work with what you've already got.
Helpful Answer (4)
Reply to cwillie
mollymoose Aug 3, 2018
Oh, we are definitely NOT following what the 2nd attorney said. But he won’t set up the annuity/trust like the 1st attorney said. He wants to charge $8000.00 (flat fee, not by the hour) for us to borrow money from Mom then pay it back in small amounts, making up the difference from SS and a small pension to pay the nursing home. Yes, I can’t keep spending money just to “talk” to an Attorney so I don’t know what to do. Also, there aren’t many elder care attorney’s in my area (the one today was a satellite office).
mollymoose, the advice is confusing. I believe the first Attorney was more on track. Your Mom did "gift" a car to a family member, thus that cost will be deducted from Medicaid. Mom would need to fill in that gap herself.

If the car is registered in your Mom's name, then Mom can sell the car, or ask the niece to go to the bank and get financing on the car and pay Mom back. Just be honest with the niece letting her know that Mom couldn't afford to give her such a gift as that money was saved for her own elder care, which is expensive.
Helpful Answer (4)
Reply to freqflyer
mollymoose Aug 3, 2018
My Mom wrote a check to the dealer for the car, but it was never in her name. It was an outright gift to my niece. It’s a three year old car broke down in another state, she doesn’t even have the money to get it back home, either by towing or fixing it. It was very obvious at the time that my mom was in bad shape, she could just barely walk.
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