We are looking to apply for community based Medicaid. My grandmother is still alive. We want to take whatever savings he has which is about 40k and stocks and bonds. How do we transfer the money to his kids, without getting penalized?

Find Care & Housing
An elder law attorney in your state can help your grandparents plan the best course to eligibility for the home care program that will help them stay safely at home.

Their modest life savings may be directed to the individual ownership of your grandmother, to non countable assets, to useful home improvements, or combinations of those, depending on the regulations in your state. They might consider setting the funds aside in a Pooled Trust account, but that step is probably unnecessary right now, considering the limited amount of funds available.

You mentioned the goal of transferring funds to their children. The elder law attorney can explain the transfer penalties that may apply to home care eligibility in your state, and to eligibility for Medicaid payment for care in a facility that will disqualify if care is needed within the lookback period over the coming 5 years.

But these transfer penalties don't apply to transactions made for value received by your grandparents, and if the children are providing any services, the elder law attorney can show them how to satisfy the requirements in your state for documenting payment for services that eliminates problems with Medicaid eligibility now or in the future.

Also, if there is a disabled family member, your state's regulations will explain how funds can be transferred for the disabled person's benefit, with no penalty to your grandparents.
Helpful Answer (1)
Reply to John L. Roberts

I am curious as to why you think that his money shouldn’t be used for his care?
Medicaid in conjunction with the federal government has very long tendrils and can access banking statements, real estate transactions and then scrutinize his financial records to assure taxpayers don’t pay for care until that person’s assets are spent on themselves- which is how it should be.
Helpful Answer (7)
Reply to Shane1124

Why would you expect the taxpayers to pay for Gfather when he has assets to pay for his care?
Helpful Answer (6)
Reply to Kimber166

Use the money for grandpa's care. Until he is actually indigent, the taxpayers should not have to pay. Simple morality.
I know Europeans have a better system, but higher taxes to fund it.
Helpful Answer (5)
Reply to rovana

My mother’s NH care cost very close to $1,000,000 of HER MONEY, earned by my dad and saved and budgeted until she was 89. Why should I have thought that it could be spent on someone other than her?
Helpful Answer (5)
Reply to AnnReid

His money if for his care, not for his children. Medicaid will catch this in the look back. He has probably waited too long to establish a trust, but you could investigate with an elder attorney. The taxpayers are not responsible to pay for his care.
Helpful Answer (4)
Reply to UsedupDIL

For one thing, there is a 5 year look back. My mom is exhausting a lifetime of savings for home aides to keep herself out of the nursing home as long as possible. 3 years ago she bought my niece a car (against our wishes) & we will be facing Medicaid penalties because of it. An Elder Care attorney we consulted for advice was going to charge $8,000 for us to be able to get us “through the system”. We didn’t want to hide or transfer assets, just something set up that would get us through the penalty phase. If you can beat the system, it’s not going to be cheap. It very well might not be worth the time, money, and worry to do so.
Helpful Answer (3)
Reply to mollymoose

You can't. Medicaid is for people who have no money besides SS and pension. You have to be in a certain income bracket to receive it. Gfather will need to use that 40k for an aide. You really need to talk to your local Medicaid office? Because of grandma, 20k of that money maybe considered hers. If so, Gfather will have to spend his half to qualify. Not sure with Homecare what you are allowed in the bank. Thats why you need to run this question by Medicaid or a lawyer. Medicaid will ask for financial info and will see that a large amount was transferred.
Helpful Answer (2)
Reply to JoAnn29
worriedinCali Dec 6, 2018
Homecare usually has the same income requirements as Medicaid, you have to qualify for Medicaid to qualify for home care so it’s unlikely grandpa will get homecare if he’s got $40k in the bank
Subscribe to
Our Newsletter