My mother-in-law gifted us 20K. She was living with us, now she is in AL. Do we have to give the gift back if she goes on medicaid?

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We cared for my mother in law at first we would go down to the bronx and stay a week, eventually in late october 2010 she came to live with us in Poughkeepsie NY. She gifted my husband about 20K, we in turn purchased a new hot water heater, paid to reroute our heating system she needed to be 'warm' warm was 75 degrees, us suffocating and our heating bills through the roof. our house being old we had siding put in along with a new roof and of course insulation. we live in a bi level house, my husband and did not care much for heat or how the house looked, but since insulating and putting back the old cedar shakes would have costed more we did the sliding. We installed new windows because she felt 'drafts'.we took care of all her doctor visits and vet visits for her dog who sadly died in March of 2011, she became depressed so we enrolled her in a day program, she loved this very much In May of 2011 rushing to get to her day program she took a fall, she was in the hospital and the doctor reccommeneded ASL. I began looking and found nice clean ones in my area for about 2k a month. My sister in laws guilt kicked in and she wanted Ma (as i call her) out in long island, she applied and being the surviving wife of a vet got in for about 3k a month. Last week she became ill with Pneumonia. she was transferred to a rehab place because she is very weak and the ASL won't let her come back until shes better. Today a "hag" called and told my husband that medicare may ask for the money back, we informed her that our intention was for ma to be with us for the duration of her life, we also told them that she gave us that money as a gift and to use to improve her quality of life. the woman told my husband to prove it. He told her that if she just got to the rehab place medicare covers the cost and then we can revisit the issue. Ma had made my husband give her a copy of the agreement when she gave him the money, it was important that she was not a burden and everyday she'd read what my husband and her signed. My sister in law initially threatened us saying we had no right to take the money actually calling my husband a thief, we informed her that she did NOT want Ma, made thousands of excuses, Me being disabled I felt we can take Ma and just work it out, which of course we did. Our hope was that she would come back to live with us until my sister in law decided she wanted to be a daughter. Being that we can prove the money was a gift it is memorialized in writing and signed by Ma and my husband, being that we wanted her quality of life improved the money was used to update the heating system, she detested going to the doctor in my low slung honda which was paid for in full and I traded the it for a 4 door car so she can be comfortable. Every last cent and alot of our own money was used to care for her. Again we never anticipated her going to a NH or a ASL. the woman at the rehab center said medicaid will force us to pay the money back whether it was a gift or not. I researched alot and it appears that we do not have to give it back, and yes we can prove where the money went. I just wanted to see if I am reading it right, you see in July 2012 I had a brain tumor removed and have a hard time understanding what I read, we filed bankruptcy in 2009, and now we have over 25k in co payments for my surgery. I just want to know if this is going to be a problem for us, and to apologize because sometimes I ask things the wrong way. Yes we can prove the money went to the house and the switching of the car, yes my husband and ma signed on the gifted money, and she wanted to give us more and we said no, can medicaid, medicare make us give money back when it was spent to improve her quality of life? please please I need an answer that I can show my husband, we are already in debt over the MY brain tumor bills and this comes at a time when the stress can bring on seizures all over again. I will greatly appreciate an answer.I'm lost here and my husband is sick over this, Ma was happy here, she wanted to stay with us, my sister in law said "I want my mother in lily white long island" that left me speechless because my family is mixed with hispanic, afro american, dominican, irish and itlaian im lost please help me?

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Since there are signed papers saying that the money was used for her care you may be okay, however you may need an attorney to sort through this. You can contact your state's attorneys office and ask if there are any attorneys who work for free in cases like yours.
Generally, if an elder just gives the money away, it can be reclaimed by Medicaid during the five year look back period. The paperwork here is the difference. Your state laws may play into this, as well, so an attorney is likely the best way to go unless you show the papers to the Medicaid qualification people and they say it's okay. Good luck. This is a problem for many people.
Carol
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Lapuppet50, be careful of the 90 days you think will be covered. I thought that too when my dad went in for rehab. But once they "plateau," meaning they stop progressing with therapy, they become private pay patients and no longer eligible for Medicare coverage. For us, that was @ 45 days. If she has long term care insurance that will cover some of the costs. If you plan on admitting her to long term to the NH, first make sure the NH will allow her to stay. Then, start the Medicaid process now or at a minimum, discuss your attorney your need to time this correctly. Just went through ALL of this. It is a long process but with good legal counsel, you can do it.

Good luck,

-SS
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SelfishSiblings make an excellent point. My MIL's Medicare therapy plateaued at less than 30 days and she become private pay. I did a lot of research when we were sorting out possibilities for the ILs. There seemed to be a great deal of latitude toward situations where an elderly person's money has been used to renovate (for their needs) the residence of the children if the elderly person was living there. After the research, we did ask the favored brother if he would like to have the ILs in his home. From what we researched, the IL's funds could be used to renovate their home to accommodate the ILs. The brother's home is an older home and would need a new kitchen, doorways, bathroom, stairs conveyance and ramps to accommodate FIL (double leg amputee). The ILs would have to live there for a long enough time (MANY YEARS) to justify the changes to a judge at a later date. We also offered them a caregiver's agreement so they could be paid monthly out of IL's pension and social security income monthly for their food and care.

We found examples online of families that had divided up their parents money within the 5 year window (which could always again be opened wider some day) and in all those cases the money distribution did incur a Medicaid penalty period. In the example of money being distributed to children and one child housing the parent for a comparable length of years, the money given to the child that did that housing of their parent was (OFTEN) not counted in the penalty period.

But you have to wonder if the other siblings will back the money by paying for the parents nursing home care during the penalty period. I suspect in many cases the other children probably claim the money is "gone" and just look the other way, while some responsible sibling tries to handle the mess.

For people looking forward and considering such use of their elderly parents money. You would have to proceed with caution and back up plans, as there are not any guarantees at all that your actions wouldn't trigger a penalty period. While you are not being ordered to give a gift back, you are being denied Medicaid until someone pays.

BIL and his family declined the offer. I suspect it was the part where we made it clear to them that they would have to commit to the rest of us that the ILs would have to remain in their home, until death. They live in a state that the income limits for Medicaid were lowered and the IL's as a couple or alone did not qualify in their state for Medicaid.
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Puppet - You are overwhelmed, try to stay focused, keep a sense of humor and realize that you will have to wade through another sea of paperwork for dealing with Medicaid. The criteria for Medicaid is pretty specific and the applicant has to provide documentation that they are "at-need" for NH both financially and medically. This is what the 5 yr lookback is all about and a 20K transfer that is 2 years ago is going to show up. Every state manages it's Medicaid program in it's own unique & maddening way. But whatever state, the probability is that there will be an issue with the 20K for your state's Medicaid program that will result in a transfer penalty being imposed over the 20K. What seems to happen often is that if mom lived with you during that period of time and your caregiving enabled her to stay there and kept her from being in a NH, then the penalty is usually waiver. But you need to provide the details to support that.

If that happens you need to do an appeal of the penalty (within the timeframe which most states are sticklers for and it seems to be a short window to file in) and provide documentation as to the use of the funds and their purpose as it related to the applicant.

How the transfer penalty works is that your states daily NH Medicaid reinbursement rate is what is used to determine the # of days in which the applicant (who is qualified for Medicaid) is ineligible for NH Medicaid payment.
My mom is in TX and the day rate is about $ 143.00 a day, so 20K would be 140 days in which her stay at the NH needs to be private paid as that would be her penalty period. What makes this scary is that often the transfer penalty letter goes out from the state (which may be managed not by state employees but via private contract with a firm, like HMS) to whomever is the contact person for the Medicaid individual AFTER they are residing in the NH. Now also the state sends a copy to the NH, which is essence tells them that they (the state) is NOT covering payment or is doing a clawback of payments until the penalty days are done. The NH will pretty much expect you to either private pay the penalty amount or sign off on a contract to do such or other agreement. If you don't, then you will get the dreaded "30 Day Notice" - which means you have 30 days to find another place for mom.
Until the penalty is lifted, mom is toast on getting into another NH that accepts Medicaid too. You can buy time by filing an appeal and going through that whole monkey cage as the NH that takes Medicaid cannot discharge a resident who is under a filed Medicaid appeal. My appeal hearing date with my mom was like 4 months out, and that is a whole lot of time to get your documentation in order. I was able to get the paperwork (this was over her car which she gifted and it's Kelly Blue Book value) all done and to the caseworker within a couple of weeks. So the caseworker was able to check that issue off his list of concerns. I also had an issue with my mom's insurance policy (a cash value ?) and that documentation had to be provided within 72 hours or my mom's application would go into the "information not provided" line and then into the declined application pile. Couple of other issues too. What I've found is that the caseworker (who doesn't get paid much) has about 15 minutes to evaluate the application, - it's not that they don't want your mom to get into Medicaid system - and they need paperwork to fatten up the file so show why it's OK to approve. You really want to provide them as much as possible that is clearly legible and matched up the dates/time/year of the $$ so they can check off "documentation provided".

Remember when they apply for Medicaid, they or you as their POA, sign off on allowing an all-access pass to their banking, insurance, burial polices, property ownership info, etc. Property ownership is recorded by the county and then dovetails into the state's system and info is just key strokes away.

I wouldn't assume Medicare is paying more than the 1st month in the NH. Most of the time with the elderly, they stop qualifying for "rehabilitation" (which Medicare pays) after 3 or maybe 4 weeks. It's exactly like what OnceHated described.
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Thank you Carol, my husband and I will do that, At this point it is not yet an issue since my MIL just got into the rehab and has been there only a week, Medicare covers the first 90 days then she will have to apply to medicaid. We did call the attorney who is handling our bankruptcy case and he replied saying "Nor medicaid nor the president of the United States can make you give back a gift, especially when there is paper trail that it was used to care for her" I neglected to add that we also in many many instances used our money to get her meds, pay a co payment, buy food and hire a private CNA or HHA to watch her so we can get a little breather. Once my husband informed the woman about the signed 'gift money' she said she will have to speak to the lawyers ...yes lawyerS with an s, and see what they have to say, and he told her,"the same thing my lawyer said, we used the GIFT to benefit her, we thought she would be with us always, we never planned or intended to put her in a ALF, let a NH. We personally feel the money was a waste because she winded up going to a ALF because it is what MY sister wanted" I will keep you updated on what happens, I called the state attorney up here in Dutchess county we found no one which is why we posed the question to the lawyer handling our bankruptcy, he told us we may not even need an attorney just the letter and the bills to show where the money was spent in which case we do have all the receipts, thank goodness i'm a pack rat.
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It is better to be poor. Stop working. Go on food stamps. When you get old, life is easier if you don't have money. It sickens me.
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I should have said, " While you are not being ordered to give a gift back, your elderly parents will be denied Medicaid until someone pays."
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Thank you so much for that response Once hated, if that happens my husband and I have decided despite my MIL getting penalized we are dealing with our own drama right now we have a staggering bill of over 155K for my brain tumor removal and in a payment plan with the hospital, we had the option of including it in the bankruptcy but decided against it. my MIL lived with her best friend for over 25 years rent free when my FIL died in 2000 she got life insurance, when she came to live with us she was at just under 55K. We don't know what she could have possibly spent 450K in 10 years but there it was, and being that homes took a nose dive in 08 we had no intention of fixing our home it was not worth it, but we had to for her we thought she would be with us for life. whatever the ASF did with her money is on them, we can prove what we did with the 20K she gave us if anything it's more like 20K from her and 12K from us to bring the house to code, and I also had to take care of her dog which was a huge hassle and even bigger vet fees. Let medicaid do what they must you can't get money out of stone and right now between me still being with vertigo, nystagmus and ataxia, I could not even afford to do the 6 more months of PT my Neurosurgeon wanted me to have, I don't understand how we as homeowners and tax payers get the shaft from the government but if you're on welfare which is my husbands money really and all you out there who work, they get a free pass? What kind of country is this?? I hate saying this but sometimes I just wished I had died on the operating table this is taking so much out of me right now.
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Thank you so much Igloo, that was so helpful I am eternally grateful to all of you. We have already notified the people at the NH that if push comes to shove and Medicaid hands the penalty we will work out something that in the end works for all of us. many hugs to you all
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It is ironic how those "HAGS" (LOL) seems to know more about the medicare/medicaid laws than practicing attorneys who studied six years of law to get their license. I bet those "HAGS" get paid pretty well on behalf of our governemnt while putting families in financial ruin to satisy the medicare/medicaid policies.
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