How much money can Mom give her kids per Medicaid requirements?


Need to spend some unexpected money mom received to Medicaid requirements. Reimburse funeral expenses ok? When my father recently passed away, Mom got a bump in her SS income that the nursing home isn't claiming. We need to spend down her money. Options we are looking at are: (1) getting her a electric bed, so she can raise and lower her head without waiting for an aide, (2) letting her give money to a sister who needs repairs on her home - (what are the limits on her giving money?). (3) Reimburse family for the money we gathered for her funeral when we thought she might die earlier this year (she's rallied quite well and surprised us all!). We are also in the process of transferring POAs to 2 new sisters, so we have to decide rather quickly what we are going to do. The ombudsman I spoke to this afternoon wasn't much help, so I don't know which option is best, allowed, or if we are missing any choices. HELP!

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Any transfers of funds to family members, even for reimbursements for various expenses you mentioned, will be deemed gifts with a resultant penalty period, if she applies for Medicaid within 5 years of the gift. If she is already on Medicaid, it will cause a disqualification period. Depending on the amount of the inheritance she received, she can purchase a "Medicaid-friendly annuity" to convert the money into an income stream. The income would go to the nursing home but at least your mother could qualify or continue to qualify for Medicaid without a penalty period.
Another option is to gift approximately half the money and use the other half to purchase the Medicaid annuity, the monthly payments from which will be used to pay the nursing home during the resultant penalty period. I have lots of examples of how to calculate this in my book. Good luck with everything!!
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No money can go to family for any reason. That will be seen as gifting and can incur a penalty. All money has to be used for things your mother needs. If your mother is already on Medicaid, then rules may be different than before she went on it. I hope someone with more information will be along soon. Will this just be a one-time spend-down?
Helpful Answer (8)

Absolutely NO gifting, reinbursement or payng ANY $ to family or others.

She is already on Medicaid, so her financial history is established and easily verified and she (or her dpoa) will have to do some sort of annual medicaid renewal with signature stating all is correct with penalties for non disclosures.

Choices are limited to buying things that is for her needs or her care or her property (if she still owns a home which is usually an exempt asset for ther lifetime ). Your moms situation is actually kinda common, as she is old & her siblings are old too and someone is going to die and could leave Sissy a bit of $ from their estate or life insurance.

Nobody foresaw being on Medicaid & needing to be & stay impoverished.

What is important is to clearly understand how Medicaid needs the reporting to be done......heres my understanding of this: say she inherits 50k. The month she is issued the 50k check it's "income" and over the amount allowed by Medicaid (income amount set by your state & most about $2,100). The month after it goes from income to "asset" and again over the amount allowed by Medcaid (2k).

IMHO you (or DPOA) need to have a plan in place to spend the $ ASAP to minimize her period of ineligibility in which she will have to private pay for her NH. Ideally you ask whomever you are getting the $ from to wait to issue $ till the 1st of the month so you move the $ through and at the end of the month she is back to her Medicaid income & asset poverty. If its under 30k, you likely can find equipment (that electric bed, a tricked out wheelchair) and a preneed funeral/burial & get this done, paid & thru her bank account within a couple of weeks. If its oodles more $$$, I'd suggest you see an elder law atty. to have a Medicaid compliant special needs trust set up for her. OR she just private as the NH till she's impoverished again.

If its $ done by an estate, she cannot turn down the $. But if the estate is still in probate, the executor could possibly wait months to payout the $. If she should die before this, then she is no longer an heir and the $ moves to whomever next in line in the will. I was executrix for an aunt years ago who's estate was pretty convoluted. It took 4 years. An heir died just a couple of months after my aunt but aunt did her will so that anyone deceased (or their heirs) was not to be included on final settlement of the estate. I, as executor, had no choice but to exclude the kids of the deceased & they were not happy. I'd suggest if this is estate $$, you speak with the executor to see what options are out there.

About reinbursement, this seems to be really super sticky. State seems to view all funds family pays on moms care or property as done by family for free and with no expectation of reinbursment & done out of a sense of familial duty. You'd have to have some sort of legal agreement done in advance to get around any payback being viewed as gifting. Even then it will drag out eligibility and a load of paperwork (this tidbit from the caseworker on my moms Medicaid application). It's imo almost easier to wait till they die and then put the $ to be reinbursed as a claim against the estate in probate. Now if the estate has no assets, then nothing to be done on your ever being repaid.

Transfer / gifting penalties are done on roughly an equation based on what your state pays the NH for daily room & board rate. So 50k penalty for a state that pays $ 300 a day is 166 days BUT for a state that pays $ 175 a day it's 286 days.
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Would the money be refunded for the burial expenses to you and sibs if mom paid that again? She cannot give anybody any money for any reason.
Helpful Answer (5)

I believe the spend down money can only be used for your Mom and no one else. You can also call your Mom's State Medicaid office and ask them for a list of what is allowed in spending down.
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Drat....should read "or she just used the windfall $$ to private pay for the NH till she's back to being impoverished again and re-eligible for medicaid."
Helpful Answer (3)

your best bet is to contact a good Elder attorney for this and other relevant questions that might arise.
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I just spoke with the Medicaid representative. Her funeral expenses ARE allowable, and she can pay those back to family members. We just have to provide documentation of her pre-need plan and the paybacks. (We also got her Medicaid rate the excess money is no longer going to be a problem!)

Thanks again to everyone who chimed in. You've been a big help.
Helpful Answer (3)

You need to call Medicaid. Each state has different requirements. No money should be given to anyone. Better you go to the Medicaid office with all papework. Bank Statement that will show what she has and the amount of SS. Savings account, CDs, RAs ect. The Social Worker at the home should be of some help.
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I really like the electric bed idea, would she own it out right or would it be a rental? If it's a rental, you'll probably pay more since you'll never on it unless you rent to own. When you actually own it, there are no payments on it when it's paid for. If she needs a power chair, you can actually buy that and any other equipment out right.

Another idea I suggest is consider putting the money into a trust so that her inheritance won't disqualify her. Putting the money into a trust is very advantageous for protecting it. However, the trustee must be trustworthy with money because if you have the wrong trustee, they can steal and not use the money on the person for whom they're a trustee. Trustees are supposed to be trustworthy, that's where the name trustee comes from. Make sure when choosing a trust that you definitely have the right kind of person as a trustee for the money. You should be able to set up a trust through an elder care lawyer who can set up certain stipulations and even put everything into an agreement that's signed by all involved parties including the lawyer. When a contract agreement is signed, it becomes valid and serious consequences can actually happen if the trustee steps out of line because every dime of the persons money should be accounted for when handling money for someone else.
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