Can having my Mom's name on my bank account limit her access to Medicaid? - AgingCare.com

Can having my Mom's name on my bank account limit her access to Medicaid?

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I live abroad. My monthly salary has been deposited directly into my bank account in Colorado for the past 17 years. Ten years ago, I added my 84-year- old mother's name onto the account, so that she can (occasionally) deposit a check for me, or to make a payment on my behalf. (While I have legal residency abroad, I use her home address as my "permanent" address, as I am not a homeowner.) I would think that since my paycheck would show that it is my income, that the money would be considered "mine." Could having her name on my account create problems is she attempts a Medicaid spend down, in case she needs long-term care? Is there any way to "claim" the account as mine, so that it doesn't look like it is part of her assets? I am saving to by my own house, so this is my life savings. She keeps NONE of her own money in this account.

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I would contact the bank and see if there is a way to limit or clarify how the account is set up. You may have to use the bank trust department as a go-between.

Please get advice from a trusted financial expert, because it's true that your account will, at least superficially, appear to be your mother's assets. Please do this soon. Good luck,
Carol
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Yes, it would be a problem, as Medicaid would see this as an asset belonging to her and expect her to spend it down. Bear in mind that her house is an asset that they will claim when she dies, under MERP. Follow Carol's advice.
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Yes, this will be a problem if you don't fix it. Yes, it is fixable. Yes, you should fix it sooner rather than later.

Caveat: I am not a Medicaid lawyer, just someone who has read several books and a great many posts on this subject. I believe the following to be correct, but if I'm "off," I hope someone who knows better will correct me quickly.

The first thing is to change the way the account is set up so that your mother is not a joint owner of the account. Talk to the bank. There may be other ways to give her authority to make the occasional deposit or payment for you (i.e., POA on your behalf) so that you are limiting the problem moving forward, assuming you still need for her to have the ability to do these things on your behalf. (If your mother has sufficient assets of her own, one possibility would be to let her make the occasional payment for you from her own personal banking account and then reimburse her from yours. But of course, she should NEVER deposit your checks into her own personal bank account.)

Next, for at least the past five years (since this is the current "look-back" period for Medicaid purposes), obtain statements for the bank account and go through them. Highlight every deposit (not just paycheck deposits; EVERY deposit) into the account, because every deposit will have to be accounted for. Then start to account for them. The paychecks will be fairly easy. Obtain or gather copies of your paychecks or paycheck information that shows these were paid directly to you.

What will be less easy are other deposits for random things that you may not even remember, particularly if you (like I do) gather up multiple checks and deposit them all at once (for example, a small refund from your auto insurance company, a dividend check from some small investment, a rebate check on an appliance, a birthday gift from a relative, and so on). If you are lucky enough to get bank statements that include copies of checks you deposited, then hold onto those statements, because they will show that these deposits, too, were of checks in your name (and, equally importantly, who they were from). If not, talk to your bank about how to obtain images of those deposited checks (it seems likely that they will have these "on file" for some period of time, so asking sooner rather than later seems worth doing).

To the extent possible, try to note what a deposit was for as well as who it was from. If you can't remember specifically, make an educated guess (but note that it's a guess) -- e.g., "1/11/10, A1180039395-13, State Farm, 19.12 -- not sure what this was for, but suspect it may have been a refunded "good driver" rebate on my Nissan Maxima policy, paid a month earlier."

Finally, note that any deposits you cannot identify, including deposits of cash, particularly substantial deposits of cash, may be difficult to substantiate as belonging to you rather than your mother, at least from Medicaid's point of view.

I realize this sounds like a tedious and time-consuming process, particularly for someone who lives largely abroad ... but I recommend doing all of this sooner rather than later, and particularly not waiting until your mother actually needs to apply for Medicaid (if you think this will even be a possibility at some point). I have not yet applied for Medicaid for my father, who should not need it for several years ... but my understanding of the process is that it is paperwork-intense, and that the "system" gives you very little time to produce all the supportive documentation it demands at various points ... so it's a good idea to have it ready in advance of needing it, particularly when "getting it ready" involves making requests of banks, which may require several weeks' of turnaround time ... and then fail to produce everything you need, requiring you to make a second request and taking another several weeks' turnaround time.

My understanding is that Medicaid will care less about who is spending out of the account than about whose money has been deposited into it ... but even so, I would imagine that being able to show BOTH that none of the deposits were of money that "belonged" to your mother AND that your mother does not regularly USE the account (if this is the case ... i.e., doesn't write lots of checks out of it herself, except that are clearly on YOUR behalf), that would all help to establish that this really was YOUR account all along, and not hers.

But that last bit would just be icing, I believe. Even if she has been spending out of the account ... or if you, like most people, have made regular cash withdrawals from your account during any time spent in the U.S. over the last five years, which would be impossible to prove as having been YOU rather than your MOTHER .... I believe this doesn't make the money "hers" in Medicaid's eyes as long as you can prove that none of the money in the account is hers to begin with. And I believe that THAT requirement goes back five years from the moment she hopes to be eligible for Medicaid.

But overall, the important thing to do is fix the problem moving forward by removing her as a joint "owner" of your bank account ... and then taking steps to substantiate that her name was on your account for convenience only ... that none of your assets were actually mingled ... and to go through the tedious steps of documenting that all deposits into the account were yours.

Good luck!
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Just how the account is set up will be the issue and if this is a problem for future Medicaid application for your mom.

Whose SS # is on the account that gets your paychecks? That should be the owner on the account as that is what will be keyed into IRS reporting. If it is your name & SS# and mom is just a signature on the account (like she can write a check on the account), then she is not an owner on the account. I would contact a bank officer (not a teller either but an officer & maybe one who works in the trust department if this bank is large enough or a client base to have this division). I am a signature on my mom's account but my SS# is not the reportable on it. My mom was a signature on her eldest sister's account but was not the owner or SS # reportable on it. How the account is set up is the ?.

It sounds like she has her own bank account(s?) in which her SS check is going into. So if that's the case, then it's that account(s) which is in her name and her SS # that will be on the radar for Medicaid. It is those bank statements of account of which she is the owner which will need to be provided for Medicaid application.

My mom's Medicaid app review was for 3 years & 6 months of all banking and financials; ran over 100 pages (mainly due to her old-school life insurance policies). If you are anticipating needing to do an app for your mom in the near future and live abroad, I think you will need to find a elder law attorney to work this through for you as you just will not be there to ferret out or deal with an issue. For my mom, one issue she had was with her old life insurance policy. Now the caseworker does not have the time to go through and read the policy or determine the legalese of the policy either, so what he did was send a letter out asking for verification if it was term NCV or whole life (therefore has a cash value) and the information had to be provided within a couple of days. If you aren't here to deal with this & right now as you live abroad, who would do this??? I got a broker who held a TX insurance license to do a letter that it was a term policy and NCV and faxed it over. The caseworker was fine with that as he just needed something to go into her file stating this. If I hadn't done this asap but waited a week or two then her application would have gone into the documents not provided pile and then declined 30 days later. The states seem to be very much working on a strict timeframes on your providing whatever documentation for the application. I've found the caseworkers want to get them accepted and work with you but the compliance time frames are set in stone. Really the next time you are in the states, try to find the time to speak with an elder law attorney. This site has a drop down list of them from the MONEY & LEGAL section. Good luck & keep a sense of humor about all this too.
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Like any joint account, it will probably be looked upon as partly belonging to your mother.
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I can answer this question from experience. Yes, if your mother and you have a joint checking account, or any other type of account, it is considered part of your mother's assets. When I got divorced, I wanted someone on my account and it seemed natural to add my mother's name.. She never deposited a penny in the account, nor did she ever withdraw a penny from the account. It was just so that the money would go to someone in the event of my death. Mom was in an acute care facility, after falling and breaking a hip and having surgery. When we got the bill, not for the cost of having her in the facility, but for incidentals (that could not be explained by the bookkeeper, who just dealt in codes and charges), it was over $5,000 for 15 days! Since I didn't know how long she would be there, I applied for Medicaid for my mother. She didn't have over $2, 000 in assets, except her home and car, which are allowed. So, it looked like a simple situation to the case worker and to me. Then...when a financial statement was developed on my mother, the case worker called and told me that since she had ACCESS to the money in my checking and savings accounts, they counted as her assets. She gave me a choice of spending my accounts down to less than the minimum for mother's list of assets or changing my accounts to remove her name and re-apply for Medicaid. Legally, the case worker did not have to give me that choice. She said the money in my accounts could be my mother's money that we were hiding in my accounts and in my name. I was fortunate to have an understanding case worker who, after seeing my dated divorce papers and the date of my mother's name being added to my accounts, believed me when I said they were MY accounts only.. I went through the process of removing my mother's name from my accounts and re-submitted all of the paperwork as if it were a brand-new application. So, take your mother's name off any accounts or assets that belong to you, and do it yesterday!!. You might get a case worker who is not as understanding or flexible as the one I had!

Another thing that most people do not think of as an asset are cemetery plots! When my grandmother died, we bought six cemetery plots. Although my parents contributed to paying for the plots, the decision was made to have the entire package in my name. That was one of the questions on the application for assistance when it asked for assets. Since the plots were worth about $2,000 each and paid for, it turned out to be a wise decision to not have them in my parents' names.

If I ever decide to work again (I am retired now), I will apply to be a human resources adviser. I feel that I know enough, from my personal experiences, to be well-qualified!

You are wise to be asking the "what if?" questions now! You could end up losing your own money or keeping your mother from being qualified for any type of government assistance.

I hope my answer was helpful to you.
ProfeChari
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