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For example, a few years ago MIL paid for a large car repair for us using her credit card paid directly to the mechanic. We live with her and are her primary caregivers providing for all her transportation needs. At the time she was happy to do this and didn’t consider it a gift. Will I have to account for this kind of transaction? Does Medicaid comb through all credit card purchases too? Will I have to provide receipts for every trip to WalMart or are they just looking at cash transactions like when she wrote a $2000 check to us to buy her granddaughter a car as a graduation gift? What about every birthday and Christmas for the last 5 years when MIL would give us $50 or $100 to buy a grandchild a gift? Is all that to be paid back? Those gifts were part of a loving grandmothers daily life and had nothing to do with paying down her assets. I’m overwhelmed at the thought of this.

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Not sure about the credit card thing. Mom didn't have any. But they will ask for 5 yrs of Bank Statements and ask about any large amounts going out. The 2k for daughter's car could be questioned. Her paying the 5k to her CC may be questioned if paid off all at once. The small amounts, I don't think so. If u think Mom will need Medicaid soon, only money used for her care should be taken from her acct.
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This kind of accounting exercise is a major pain in the btm and I feel for you.

If it is any consolation, once you have lined up your ducks and you start slotting them into their correct places and you've got into the swing of it, it's not nearly as bad as you think it's going to be.

I believe I'm right in saying that anything more than 5 years old doesn't count? - people who actually know will correct me if that isn't true, I'm sure.

I'm afraid the graduation gift is manifestly a gift.

Bear in mind that this is not about whether your mother's family have "wickedly" been accepting things from her in some vaguely immoral way. It is purely an exercise in determining whether your mother's financial need for public subsidy, which is what Medicaid is, has come about in a way which entitles her to support from society at large. It is never going to be a perfect system, but it was designed to filter out not ordinary families such as yours but much wealthier families who would happily run rings round the system, divest their parents' millions, and then fund expensive care through the public purse.

The best thing to do-oo-oo is... a spreadsheet. Bung absolutely everything on it. Categorise into three top headings

Definitely okay
?/partially okay
Definitely not okay.

I believe there is a cap on Christmas, birthday and similar gifts? Anyone?

Every trip to Walmart, no. But if her typical weekly grocery spend has been, say, $40; and in the last two years it's become more like $90 because she keeps getting treats for the kids and a six-pack as a thank you to your DH... you're going to have to explain.

The car repair is arguably for your mother's benefit. Certainly part of it it's legitimate to charge to her. But unless you *only* use the car to transport your mother, then you will have to figure out what proportion of the bill you can legitimately "claim" from her. The rest of it: gift.

When you've got a hideous job like this on your hands, the thing to do is break it down and get as far as you can.

Is it the case that you have a horrible sinking feeling that the discrepancy between your mother's obviously routine spending (which is fine) and what may be challenged is going to be too big to cope with? If so, it is *still* best to get it down on a spreadsheet or even just a big piece of paper and LOOK at what you're dealing with.

I'm not even American so I'm not pretending I can tell you what Medicaid will say about a particular item, but I hope this helps you make a start. Mind you, Medicaid's own website may well have helpful guidelines, have you tried them?

And just think how good you will feel once you've got it done. Hugs.
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Anything paid for that is not directly for their care or their property can be considered gifting by Medicaid with transfer penalty placed.

A 5 yr lookback is standard for financial review for Medicaid. Just how deep the review depends on how your states Medicaid administer it’s program, especially on cross reference with IRS & state databases and how it deals with living costs. By the latter, I’m referring to if she’s still living in her home; or paying to be in IL or AL; or has in-home care by an agency or paying family per a legit personal care agreement.

Medicaid isn’t expecting your mom to live on air.
But Medicaid will know what her banking showed as assets 5 years ago, what her “awards letters” have been (the annual letter from SSA & other retirements that state to the penny what the incoming year income to be), and what dividends, interest, etc have gotten reported to IRS. The caseworker has a formula that they use to determine if their 2k impoverishment is plausible.

Probably most unexpected item I dealt with mom’s application was on bank letterhead signed by bank officer a listing of all accounts closed in last 5 years and the date, amount & disposition. Like CD #12345 $5,098.76 expired 11/22 deposited checking acct #98765 11/22 $5098.76. Fortunately all CDs, etc all got deposited in full into checking acct that also was got direct deposit SSA and civil service annuity. So it was clear and obvious where $ went. Had any been cashed & not deposited in full to the penny, I’m pretty sure there would have been a transfer penalty inquiry opened on her.

Remember by applying for Medicaid, you allow an all access pass to their financial and medical history. It’s pretty fast to do a real property search in state database. For example let’s say, in 2015 mom sold home for 100k & car for 5k, IRS shows interest 1099 paid 2014 -16 (even though she didn’t file taxes) & gets an average of $1500 a mo income; she lives with family & provided no caregiver or rental agreement in the Medicaid application documents. So this mom in theory has had at least 190k within last 5 years and whatever the investment was that she got interest paid on. Over 200k and is now down to 2k. To be at 2k and impoverished does not make sense if avg cost of living is 18k for your area. Should have abt 70k - 100k unless she had extraordinary medical costs or can show she paid 50k on a solo Orient Express vacay. If not, then in the words of the handsome & Uber talented Desi Arnaz....”Lucy jue have sum splaining to do”.

If mom doesn’t own a car, paying auto mechanic totally a red flag.

Really you know right now there’s gifting.
And your living in her home without any type of caregiving agreement or documented assessment on her care needs, I’d guess.....
Imho before you try to DIY this & maybe screw the pooch even more, get mom’s financials together and go meet with an elder law atty who does Medicaid planning. Ask specifically if they deal with transfer penalty issues and caregiver agreements. Many elder law atty are all about estate planning, that’s not your mom’s situation.

Try to get on this asap, so everybody starts 2019 with defined legal for caregiving agreement set up with IRS, FICA done, updated POA, perhaps new codicil on old will, rental agreement.

Realize from day 1 of LTC NH medicaid, Mom will have no $ for the still in her name home. Her monthly income becomes a copay to NH.
All property costs fall onto you. She gets avg $60 allowance a mo.
Her homestead exemption may be canceled as she lives at the NH, so big jump in property taxes.
Medicaid may not do caregiver exemption to Estate Recovery till after she dies, which could be years. If so, only then can you file for it. So you have to be able to pay all property costs till whenever.
Medicaid may require you to pay FMV rent.
Really discuss all with mom at the attorneys office.
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If grandma is to the point someone has to live with and care for her, she may not have the mental capacity to be giving "gifts". This could be deemed elder abuse. I would tread carefully and document everything. If there are other heirs, they also can make an issue of this. Bottom line, don't take advantage of grandma.
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I never realized that my mother being a complete cheapskate is going to benefit me when the time comes for long term care. No gifts given, no loans, charges on her card. I make sure she pays me rent every month so she can show her living expenses are accounted for. I’m sorry this is going to be such a pain for you, but wonder what it would be like to have a giving/generous parent.?
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In helping to do Medicaid applications I have found that DSS usually only looks at large "gifts' or payments to others of $1000 to $2000 or more depending on your state. Smaller normal living gifts of $50 or $100 here and there don't get looked at. As for the car expense you may have to explain that and even show documentation. They are just making sure that an elder did not gift away to make assets less to qualify for Medicaid.
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Medicaid has strict laws. Best to hire an elder estate lawyer.
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I've been through this for my in-laws. I absolutely recommend an attorney who specializes in Elder Law, and don't wait until she is impoverished to Medicaid standards.
Try to have all the financial info compiled before you go to the attorney. Bank statements, credit card statements, tax returns, insurance policies, etc. You can find out what you need in advance. I took 5 years of bank statements, and they only looked at 3 months!
Honestly, I think having an attorney do your application is the best way to keep Medicaid from questioning every little thing. Whether that's because they trust an attorney more, or they just have better experiences with getting the correct info from the beginning, or I'm mistaken, I can't really say. But the amount you pay the attorney is part of her spend-down, anyway.
The attorney can tell you about the gifting issues, and how your State looks at that. No one on here can give you the best advice for you; we can only speak from our experience. My in-laws gifted as your mother did--birthdays, Xmas, etc. I'm guessing that even the $2000 graduation gift won't be a problem, unless that was all the money she had at the time and/or she gave it the day before her Medicaid application, but that's just my guess. Your attorney will know.
The most important thing, imo, is to do it NOW. Then, you have answers and a clear path to follow. You will also have an up-dated will, POA, living will, etc.
Our attorney charged about $7000 or $7500. Not inexpensive, but worth every cent, imo. Same as about one month in the nursing home shifted to Medicaid instead of paid by Mom. You can get a free initial attorney consultation where you will be given plenty of information and a price quote. Some elder law attorneys do free seminars where they explain your state's requirements. If you have access to one of these, that's a great start, but I wouldn't wait for that if you can get an appointment sooner.
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Thanks so much everyone. We were able to meet with someone at the nursing home who gave us lots of information and eased our worries and fears. She said what you said, Agingmyself, that they will likely only look at 3-4 months of statements unless they see a red flag. It will still be a lot of work but I’m not concerned about red flags. We haven’t done anything wrong. Our funds are not commingled and we have not used her funds in any way but for her needs.

I also found an attorney that specializes in Medicaid and we will use him to help us.

Thank you all!
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anonymous434963 Dec 2018
This is good! All will be well financially, so that's one less worry. Best to you.
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