In 2020 she needed major house repairs, this is when I realized she had some form of dementia, because she had spent all my dad's life insurance over 6 months for shoes and purses like a child. I found out her house was not insured. Because severe weather had come thru her area and basically every window was cracked or broken, I took out a loan and replaced 17 windows, purchased homeowners and termite bond. My mom would say thanks for repairing my house when I die u can take the cost out of the sale of my home.
i sold her house in January to help pay for sitters while I work. So I have gathered my receipts for all the home repairs and deducted the money out of the profits from her house. Will Medicaid think that's wrong? Or as long as I have my receipts will there be any issues? Any one have info to share?
So beyond good you have kept all receipts as you or a CPA will need to do a forensic accounting approach to documentation LTC Medicaid requires…. that receipts match up to the penny & show $ used to pay loan off. NO GAIN. & work done needed for ability for you as POA (as written in your POA) to be able to sell at FMV fair market value & ability to have a Realtor show it safely & securely. If you have before & after photos that will help. That one spend was for termite work & it’s bond imho beyond excellente as establishes spends were not for frills that you could yourself use but honest to goodness costs to deal w/decades of delayed maintenance.
Things were done using your POA authority to do required fiduciary duty to take care of her assets. Her wish for you to take $ is just that… a wish.
I think you can do this if you have receipts & no fudging on #s.
HOWEVER…
Im also concerned about 3 other things
1. that by doing above, her LTC filing will be looked at more deeply… so how has her mo. income & remainder of Act of Sale $ being spent down? Mom directly paying for caregivers, or you paying for it and she then reimburses you? Mom needs to be paying directly and from a bank account hers only. If $ commingled and u are still paying then reimbursed and this has been your approach basically everything “mom” for years, I would not try to DIY her filing but find an elder law who is proficient in working with LTC Medicaid applications and mom uses her $ to pay for them to shepherd her LTC Medicaid filing.
2. I’d be worried about IF whether or not is sufficiently medically “at need” for LTC Medicaid which means current health chart in detail that needs skilled nursing care w/ 24/7 oversight. Unless your in one of the few States that use Medicaid LTC funding to pay for Assisted Living, she will have to medically be fully needing Skilled for LTC Medicaid to pay. Someone living in family members home able to be on their own and manage, even with a sitter coming in periodically may not be this.
Folks get all wadded about financial aspect of LTC Medicaid but the medical at need equally as important and way harder to deal with as it has to have others do the evaluations.
fwiw often this scenario:
elder has bad fall in their home, breaks a hip, EMS called, go to ER/ED; surgery & hospitalization (Medicare Part A billing); discharged to rehabilitation in a NH with rehab unit (also Medicare Part A); Medicare pays 20/21 days @ 100% and most are deemed not “progressing” within this period of time so segueway from Medicare rehab patient to a Long Term Care custodial care @ the NH. And it’s either private pay, LTC insurance or are impoverished enough / do a “spend down” to be ok for LTC Medicaid eligibility and the NH accepts them as Medicaid Pending. They have a fat health chart with a bow on it that shows “need”.
Imho admit directly from living independently will be daunting unless she has recent outside assessment in detail to show skilled with 24/7 oversight necessary and that is what is being provided for currently. If a NH has oodles of open beds, they prob can work with you on getting this done with brief private pay period (to create the health chart details), then she goes Medicaid Pending while application processed.
3. how are caregivers being paid? IRS views them as household employees so FICA & W-2 done. Reported taxable income. Not contract labor.
You have now sold this home that was I assume in your mother's name. This means she now has assets. Medicaid is likely going to want to be reimbursed IF they have already spent taxpayer funds on her care, and they will likely remove her from Medicaid. Or she will not qualify for medicaid until the assets from sale of her house are spent down.
Do see an attorney for best options now. That's ONE way to spend down the assets!
When you need expert advice on finances you go to CPA, and when you need expert advice on Medical issues you go to a doc. So now you go to the source itself or to an Elder Law Attorney. Then YOU are the expert, and can come back and let US know the facts for your own state.
I wish you the best of luck.