My 90 year old aunt lives at home and her son is her full time caregiver. Her husband died a year ago, so if she requires long term care, her husband is not alive to reap the benefits of spending down their money. How does she spend down her assets to qualify for Medicaid? We filed for Medicaid for him as he required long term care in a nursing home for the last 5 mos of his life. My aunt benefited from the spend down of their assets, as that was the rule. How does the spend down work when a spouse is not at home to have the money spent on their needs? Can her credit card bill be payed off?
...most states have a 5-year financial "look back" period on the application (some states are 2.5 years).
...most states' Medicaid programs will only cover LTC (but not all states).
...Medicaid will scrutinize financial/asset "gifting" during the "look back" period, the amount and definiition of which can vary by state.
...your Aunt's assets should be spent on herself, her needs, health and well-being. Even consider that she can probably go into AL on private pay in a very nice facility that accepts Medicaid and stay there until she nears the end of her funds. At that time she can apply for Medicaid.
This may or may not apply to her state, and so she should contact a knowledgable professional who can review *all* her financial information and give the correct guidance.
Spending down assets has to be for her care, for her benefit in some way.
So the Skilled Nursing facility that you choose make sure they also take Medicaid some do some do not. She will get the quality care that she deserves and when assets run out she can remain in the same facility, same staff. (if she is in a private room she may have to move to a shared room so you might want to think about starting her in a shared room, advantage money will last longer anyway)
Pre plan and pay for her funeral.
But the others are right talking to someone qualified to answer the Medicaid question you have is the first thing to do. Either Medicaid or an Elder Care Attorney or both
*Pre-pay for her funeral
*Maybe her bathroom needs remodeled to accommodate wheelchair or walker access
*Does she need a lift chair
*Does she need a tub that she can walk into
*Does she need clothing that is easy to get on and off
I do not see anything in Jmhunt90's question that indicates this.
The mention of spending down and the aunt was the "recipient" of the spend down.
If there is no spouse to get the advantage of items that were purchased and the person needs little else what can the assets be spent on is the question I am seeing.
Now I am one to see a "hidden agenda" in some of these questions but this one I am not seeing a "how can we hide as much money as we can so that the family can get as much as possible when old aunt Betty dies"
In any case my answer is the same.
Pay for the best care that is possible for as long as possible before there needs to be an application for Medicaid. Wouldn't you want someone to do that for you?.
If entering a nursing home now before one has qualified for Medicaid long-term care coverage; one enters as "private pay." Frankly, many facilities like it when one enters as private pay as the rate may be higher than what Medicaid pays and it is less paperwork for them as well. Someone (you? if you are the POA), would write checks or pay the nursing home from your LO's accounts (keep all records)....
Once the LO has spent down to below your State's Medicaid asset limit (might be a total of $2K, this limit is State-specific), then one applies for Medicaid long term care coverage. Usually your LO's nursing home if they are qualified Medicare and Medicaid facility (hope so) have folks on staff in their business office who deal with this and can help with the application itself. Lots of paperwork to submit so start collecting that now. And the facility on their end has to complete the "level of care" paperwork confirming to the State Medicaid folks that your LO medically needs the "level of care" that a nursing home provides.
If there are a lot of assets to "spend down" (home, condo, car, lots of valuable things) this is where it can be hard and take time as ALL of that -- given there is no spouse/no "spousal impoverishment" rules come into play -- can get tricky and can take time especially if there is a house to sell. But all valuable/tangible assets count towards the asset limit and are part of the spend down. So any proceeds from the house sale, sale of other things nevertheless go to pay the nursing home privately. Then once ALL the assets are liquidated and spent (paid to the nursing home); then Medicaid long-term care coverage comes in to take over paying.....
Moving forward any income (Social Security, IRA distributions, any funds inherited, etc.) are largely paid to the nursing home. States allow the person to keep only a minimal amount (maybe $85 or $90 dollars per month) but the LO's bank account has to remain below the state Medicaid asset limit. So one might have to buy a few things your LO just to keep their bank account below that limit (often about $2K) and keep receipts as each year your State Medicaid folks as part of "redetermination" will need to confirm what your LO's funds were spent on in the past year to continue qualifying for Medicaid.
As part of the "spend down," Medicaid as a Federal AND State coordinated program have various rules including the 5-year look back. This means, any financial decisions, spending, or actions made by the loved one (LO) seeking Medicaid long-term care coverage will be reviewed 5 years back. If there were efforts to "hide assets" (like gifting or giving away money and assets) this is a no no.
Yes, one may spend on a range of permissible things (lawyers fees for Medicaid and/or end of life planning; prepaid funeral expenses; living expenses, such as mortgage, real estate taxes, food, utilities, etc.; taxes in general, on and on). But if one is passing off funds or assets to family, friends, etc. this can be a big problem if the goal was to hide or offload such assets.
The State Medicaid folks will ask for bank records and receipts, including any retirement accounts (Social Security payments, IRS/401Ks); health insurance coverage and expenses, such as Medicare and/or retiree benefits or supplemental Medicare coverage; tax filings, valuations of home or other tangible assets, etc.) all going back 5 years!
Much easier if you have access to ALL your LO's accounts on-line now to be able to download documents. Regarding the son, they lawyer can help advise. But if not added to the deed (house?) 5 years earlier, likely he'll loose the house.
Good Luck w/this
There are national companies that help a person apply for Medicaid, but they only use a computer to get the specific rules for each state. The person I talked with in an initial interview told me that PA does not allow excess income to be put in any trust. The initial consultation ended abruptly because my husband's income was over the limit. Since then I have learned that PA does all the excess to be placed in a pooled income trust account.
Be careful. Not all experts are alike.
The Son lives there full time and has been her caregiver, right?
So if she goes into a facility - whether private pay and doing a spend down to eventually qualify for LTC Medicaid OR she is Medicaid Pending from day 1 - does Sonny have his own home to move back into?
is her home essentially his home?
Does Sonny have his own income? Like is he getting his own Social Security income ea month? Or he has his own savings or investments?
Depending on the answers, aunties applying for and eligibility for Medicaid may need to be looked at from a slightly different perspective.
Auntie does NOT have to sell her home. By & large for most states she would be allowed to continue to own it as an exempt asset for her lifetime. If Sonny as her heir, might be able to qualify for one of the exemptions and exclusions to Medicaids estate recovery system. It is not a straightforward process as to just what can happen. It is - in my experience - very interdependent on your States laws for property rights, probate and how recovery runs.