When looking at the last 5 years... - AgingCare.com

When looking at the last 5 years...

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Good Morning!
My mother is already on waiver and approved to move to the LTC community from independent living where they reside.


My father, however has dementia and it is advancing and this past week just learned that they both are ready and need to move ASAP from independent to LTC. They have small amounts of debt, however it is not CC's.


The debt they have is within their bank account.
They have an installment loan, a line of credit and a "visa" (i guess line of credit) or a "virtual credit card??". I am on their bank account with them because of my father's dementia.


When looking at the last 5 years:
Do they want the last 5 years bank statements physically?
Do I need to be removed at this point so I am not responsible for these debts?
Do I need to go to the bank manager (Who I know) and let him know what is going on tomorrow?
I do not have a POA at this time, but my father is more than willing to sign one if needed.


My parents also have a handicap accessible van that they purchased while qualifying my mother for the elder care waiver. They still have that van with 300,000 miles on it but it works awesome. This would be an asset at this point, however face value is quite low.


If we do not keep the van there is no way to get my mother out and about for example to family gatherings. Advice?


Any help would be fantastic or further thoughts in this process.
Thank you.


We live in the state of Iowa

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For Medicaid purposes, you will have to produce the "5 year lookback" of bank records. Yes, retain an attorney. 
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You need a lawyer, because you may be in jeopardy for their debts if you are a joint owner of the debt. Yes this affects your credit.
For five year look back: all bank records, including check images. The last five years of tax returns, property deeds, vehicle titles, marriage certificates and more.
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CK - I'm assuming they are both going to apply for Medicaid & your state has a waiver program so that they can go into AL or MC on medicaid waiver and not into skilled nursing in a NH (dedicated medicaid funding).

Did the facility explain thier co-pay or SOC (share of cost) requirement by Medicaid?
Basically on Medicaid, they are allowed usually 3k in assets BUT all their monthly income (like their SS & other retirement) must be paid to the facility as the SOC. But each will get a small personal needs allowance. pNA varies by state from $ 35 -$115 a mo. That's it for $ for them from here on. Basically PNA covers beauty or barber shop charges and some clothing replacement. Some facilities have a fee for phone or cable and it eats up the whole PNA. But any other costs - like any old debt, things not covered by Medicaid like better hearing aids, eyeglasses, dental - will need to be paid by someone other than mom & dad.

Their van is an EXEMPT asset. They can keep it. But family is going to pay for all it's costs... Like gas, repairs, insurance. Whomever is the DPOA should contact current auto insurance agent to see what needs to be done to extend coverage to another family member (s) and to change the address of where it's "garaged".

If van were to be gifted or transferred to family, that would pose a gifting transfer penalty on them from Medicaid. You don't want to go there....

About the 5 year look back. It's going to depend on your state. Sometimes if they are in IL or AL, it could be 3 years as you kinda know where $ went. For my mom who as in IL & moved into a NH (bypassin AL) it was 3 yrs & 6 mos of bank statements, plus an on bank letterhead signed by bank officer statement in detail as to the disposition of all accounts closed within 5 years. So like CD #1234 for $ 5,015.00 expired 3/12/13; deposited into checking account # 5678 for $5,015.00 on 3/12/13. I'm pretty sure that if any CDs, TBills had just been cashed out, it would have caused a transfer inquiry for my moms application. if there are any withdrawals or checks that seem odd, you may need to explain what for. Mil had a inquiry as mil wrote checks to a state paid caregiver so she could cash them & buy liquor for her ..... explainable but not pretty. If there's anything unusual in their banking think if it could pose a problem.

My experience has been that the facility gives you / DPOA a list of documents that need to be copied to accompany the medicaid application. Like their annual awards letters fom SSA & any retirement income, insurance policies, funeral policies, insurance cards, any real property last tax assssor statements. If your state does an annual renewal, you want to keep all these in a binder for future.

Their debt doesn't matter for Medicaid approval. But again realistically they won't have any income once on Medicaid to pay on those debts. Either family pays or debt is defaulted. If you personally have signed responsibility on these debts, your going to need to pay or ruin your credit score or find collections coming after you.
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