My mother, my brother, and I live in 3 different states. My mother has refused to come live with me so I could care for her for many years. Now she's at the point where she can no longer care for herself. She sold our family home 8 years ago because after my father died, she couldn't take care of it herself. She moved into a senior apartment. She has less than $75,000 left in the bank, and she and my cousin who lives near her keep telling me that with this 5 year look back, she can't even gift my brother nor myself anything. I had read about a one year gift of $15,000 and then there's a one time gift which I don't know the amount. Who would get penalized if she did that? She and my father always wanted to leave us something, and it kills me that she can't and it will go to the state. And why does she have to spend down all of her money and people on welfare always seem to get a free ride?

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Your questions are common to those of us who witness the declining health of a parent. Your mother's life savings can be managed in a way that protects her health and allows her to live in the least restrictive setting now, while preserving her eligibility for Medicaid if that is needed in the future. Disqualifying gift transfers could end up hurting your mother, and whoever took the gifted funds, if a Medicaid application is needed within 5 years following the gift.

Assisted Living may be a next step from her apartment; the services provided in Assisted Living could save or postpone the need for a nursing home admission. There may be subsidized Assisted Living units available in your mother's home area. If not, are there SSi-G or Group Adult Foster Care subsidies for Assisted Living available in your home area?

Your mother's reluctance to take the next step is also common. Consider consulting with an Elder Law Attorney and a Geriatric Care Manager in your mother's home town. These professionals could help you bridge the communication gap, and open her thinking to the possibilities for a new living situation, including a move to your home area, IF you are prepared to take on the work of care provider, or there are suitable Assisted Living facilities close enough for frequent visits.

An Elder Law Attorney in your state could explain subsidies available for Assisted Living and/or how you can be paid to provide the services needed to safely care for your mother. Your mother's life savings paid through a Caregiver Contract and/or Rental Agreement with you might be supplemented by Medicaid home care programs in your state (plus a Veterans Aid & Attendance pension if your father or mother served during time of war).

Others have posted here to remind you of the potential for transfers that don't disqualify and the non-countable assets that can be purchased, and an Elder Law Attorney can interview you to determine whether there are exempt individuals in your mother's family, to explore the possibility of transfers that would not be disqualifying to your mother.

Often, a reluctant parent can become interested in new living arrangements if financial advantages are presented to them. If you present the ideas as incentives to "save money" you may find the elder more receptive.

The $15,000 figure you mentioned has to do with an annual Gift Tax Exclusion for wealthy people who give away money during their lifetimes, to take advantage of the annual exclusion from the requirement they file Gift Tax Returns reporting gifts of more than that amount. The excluded gifts don't cut into their lifetime credit for transfers of wealth otherwise counted on their Estate Tax returns.

Your grief over confronting the spend down of funds is understandable. Continnue to approach it with your mother's best interests in mind, and rewards may be found in ways we could never have imagined.
Helpful Answer (5)

If Medicaid discovers that your mother has gifted any money to anyone in the past five years, that person will have to pay it back, to Medicaid or they will deny coverage to your mother. Your mother’s funds can go toward a Long Term Care policy or funeral pre-planning. My mother scrimped and saved for years so she could leave me money. Then she went into a facility and all that money went to self-pay until she had less than $2,000 left. As far as the one-time gift, etc., contact an attorney who specializes in Medicaid. If this is done, it must be done in the right way or once again, Medicaid will deny coverage.

And just as an aside, people on Welfare do NOT get a “free ride”. Most would rather not be on it. Your statement is a generalization. Unless you’ve walked a mile in a welfare recipient’s shoes, don’t judge.
Helpful Answer (7)
worriedinCali Dec 2018
The one time gift has nothing to do with Medicaid so there’s not reason to contact an attorney about that. Medicaid doesn’t allow a “one time gift”. The one time gift has to do with paying taxes. Not Medicaid eligibility.
You may not know this, but many people are only on welfare because they some help to get back on their feet. There are many people who are embarrassed to be on it, and work really hard to become self sufficient. It is a sense of accomplishment to be able to take care of one's self without having to turn to the Govt.

As for your questions, that is how the system is. Medicaid is taxpayer's money. If the money was never paid back, it would quickly go broke. I'm sorry that your mom is in the situation that she may not be able to care for herself and will need assistance. That being said, even if she could still take care of herself, why would it matter if she left you money or not?
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Isthisrealyreal Dec 2018
Its the professional welfare recipients that are breaking the bank. The ones that don't get that it is tax dollars paying for all their freebies. Or the ones that believe they are entitled to an inheritance no matter who pays the bills.
Sophie; It's your mother's money. It's there to be used for HER care.
Helpful Answer (6)

In essence when your mom goes on Medicaid to pay for nursing home - she is on "welfare" - the taxpayer is paying for her nursing home. Why should we tax payers pay but you get her assets? Welfare is for those who do not have assets. She spends on her care first - then when she is broke - she is not turned into the street - she gets taxpayer funded Medicaid.

If you want the inheritance - then don't apply for Medicaid.
Helpful Answer (6)

If it makes you feel any better, your mother will have better options for a placement if she is able to enter as a private pay patient and then convert to a Medicaid bed. That's generally how you get a Medicaid bed in a better facility.

If you get placed directly into a Medicaid bed, your options for placement can be limited. They can offer you a placement in any facility within 50 miles. This can sometimes mean placement in a facility where it would be very difficult for your family to visit you. And visits are very important. You might get lucky and get an open bed in a good facility. But you have a lot less options.

The answer to your question is the family would suffer if your mother needed a nursing home placement and had gifted away money before applying for Medicaid. The family would have to come up with enough money to pay the nursing home bill until the penalty was reached.

The $15k number you are talking about has to do with the money allowed to be given before the giver needs to pay gift tax. It doesn't have anything to do with Medicaid.
Helpful Answer (6)

If your mom has money, she needs to pay for her care.

It kills me when people think my tax dollars should go to caring for their parents so they get an inheritance, which is a gift not an entitlement.

If she has gifted you any money over the last 5 years, the family will have to pay all of it back before Medicaid will get approved.

Welfare is abused, no doubt, as you yourself are trying to figure out how to get around the rules. One day there will be no aid because of fraud, taxpayers can only pay so much before they to have no more to give. Get over the idea you will get an inheritance, your parents money is theirs to be used for their care until they die.
Helpful Answer (4)

She could pre purchase funeral expenses before there is nothing left. That could be her gift to you so that you are not financially strapped with this. She can also pay you and your brother for assistance for her like managing accounts or driving her to appointments. For this you would need a legal contract set up and consider that you may have to pay taxes on your income. Now is the time as part of the spendown to see what legal advice there is as each state has its own set of rules.

Your "expected" inheritance should not be killing you. She needs to live on her assets as long as she is alive. We taxpayers should not be spending anything on her as long as she has assets.

Excluding your comment about welfare which women with children are getting some funding but possibly not even enough to put food on the table. I will offer the following simple answer. Mom will need every penny until she qualifies for nursing home. I will estimate that private pay will be $8000 to 9000/ month so she barely has a year to spend. If she gets Social Security, the time will be stretched out a bit. If she gifts each of you combined a total of $30,000. Then she will be penalized about 6 months of care. So how will you and your brother be able to care for her? If she stops walking or cannot cook for herself, can you or he quit working to provide 24/7 care with no supports?
Helpful Answer (4)

If your mom is at the point of needing a facility - whether it’s AL or NH - imo she is way way waaaaay past the point of doing any creative financial planning to get in place before Medicaids 5 yr lookback. That ship has sailed.

Your cousin is spot on correct that any $ given to you or your brother will pose a problem for your mom’s Medicaid’s application.

Should mom gift you or bro $, it will place a transfer penalty on her which will be a # of days of total ineligibility for Medicaid. Please realize that in order to apply for LTC medicaid, she will have to be “at need” both financially & medically. Financially =impoverished with no more than 2k in nonexempt assets & under her state’s monthly income limit (+/-$2100). So if ineligibile, to stay in NH, you or brother will have to private pay with binding contract done. She’s impoverished, with a max of 2k assets, as she has no $ as she gifted it to you all. It will surface as 5 yrs of bank records submitted with her application. So either you pay for her care in her current state, or she moves into your home becomes a resident of your state then you can caregive or she’s uses her monthly income to pay for in home care and she does not apply for Medicaid till past the 5 yr look-back.

also Medicaid requires her to do a copay or SOC (share of cost) of almost all her monthly income paid to the NH.

$75k gifted would be on national average 428 DAYS of ineligibility.

The 15k / one time gift rules pertain to IRS & taxes. Not Medicaid.
LTC Medicaid places penalties on any gifting or transferring of assets done within 5 years back from the date of her LTC Medicaid application. It is not based on the date $/assets transferred.

She can legitimately do a spend down of much of that 75k $: fully paid funeral & burial preneed, update all her legal, get co$tly dental work done, new eyeglasses / hearing aids, better quality walker or wheelchair and leave like $1800 in a bank accounts that’s PoD to you or bro to take care of post death incidental costs (like funeral florals), then she uses balance left to private pay for a few months at a NH that has Medicaid beds so she can hopefully easily transition from private pay to Medicaid Pending and then fully onto Medicaid.

Please please be aware that most states ”at need” medically means clearly showing in her health chart needing skilled nursing care aka a NH. Most state LTC Medicaid programs do not pay for AL. Some do not pay for MC. For those who are living still at home or in IL, they may not have the fat medical chart to easily show “at need” for skilled nursing care. My mom was in IL and did the jump from IL to a NH totally bypassing the AL phase. It was not simple and took several months to truly build up her health chart to establish she was “at need” - it’s only on retrospect that I’ve realized how rare this is to accomplish. Most NH admits come from a hospitalization..... usual scenario is that they fall & break a hip; go to ER then get hospitalization with surgery (MediCARE); discharged to rehab at a NH that has a rehab unit (MediCARE benefit 100% for 20/21 days then at 80% up to 100 days); then they stop “progressing” in rehab (MediCARE stops) and are determined unable to return to home as they need skilled nursing care. Medically “at need” with nice fat health chart to support that determination. Just being old, or needing help with their ADLs or having early dementia symptoms will not be enough to show needing skilled nursing care. It’s mucho importante that you know what her state has set for medical criteria for Medicaid to pay for a facility and if she’s “at need” medically.
Helpful Answer (4)

Medicaid is a program for the poor not those who have assets. And as the other person posted people on welfare do not get a free ride. Even with assistance, the lifestyle of those on welfare is nothing to be envied by anyone.
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