Mom is living with me, has Parkinson's and dementia, and has money in the bank. My name is on her account. How does she legally get rid of her hard-earned money before the inevitable is upon us? (nursing home, hospital, etc...) From what I understand, she can "gift" $15,000 a year to as many family members as she wants, with no penalty. With that being said, can she write her checks as gifts all in one day, wiping out 3/4's of her bank account? If in 5 years she goes to a nursing home, will they question the gift giving?
Thanks for any help.
Beyond that - One of the people who used to be a regular on the forum said all our lives we save money for a rainy day and momma, it's pouring! Isn't the reason people save for their old age so that they have the money to pay for care if they need it?
My daughter will tell you residents are not treated any differently if private pay or on Medicaid. I found this true but, when Mom was private pay she shared a room. When she went on Medicaid, she was put in a 4 bed room.
Medicaid will transfer penalty $ gifted against her Medicaid application.
Should she apply to LTC Medicaid as she needs to be in a facility for her level of care, so she is “at need” medically for a facility that participates in LTC Medicaid program, Medicaid will require 5 years (3 yrs in some) of all her banking info and all info on any assets she has and documentation on her income (like annual award letter from SSA). If she owns or owned anything “real” property (house, land, car) info on this will be just keystrokes for the Medicaid caseworker to find as stuff like this all dovetails into state database. So no going an buying a fancy new $$$$ car or giving it yo a grandkid. If she gifted or transferred $ to others, it will surface eventually AND will trigger an in-depth review of her application and place a transfer penalty (based on days ineligible) on her application.
Transfer penalty IMO is a real swamp to get in as in order to apply for LTC Medicaid you have to be in a facility, so they are building a bill every day there and when the penalty gets placed, it could be 1, 2 or 6 months later, $$$$, and that facility will do whatever it takes to get bill paid.
She would need 2 gift this summer and not ever need Medicaid till Fall of 2026. That is a long, long time.
If it’s on the imminent horizon that shes needing a higher level of care than you can ever provide in your home, IMO, it’s too too late to do any ahem “creative” Medicaid planning. That ship 🛳 has sailed.
She can legit spend down on things she needs….. like a preneed funeral & burial policy, dental work (as Medicaid doesn’t cover this & dental could easily cost 30-70k)), new hearing aids, eyeglasses, a speciality Walker, etc. She can meet w an CELA level of elder law attorney to update all her legal and see IF there is anything she could plausibly do now and be ok for how Medicaid runs in your state. Like she does a personal care agreement with you to pay you for caregiving or pays you rent & all done so reportable income for taxes. It’s not a DIY. But again if higher level of care is needed soon, she’s gonna first & foremost need to spend down assets & use her income till she’s impoverished & eligible for LTC Medicaid. It’s the harsh reality.