Follow
Share

I think I have decided to go ahead and place my Mom in a lovely AL community that will accept her (much to my surprise) within the next few months. Mom added me to her deed a while back so that probate wouldn't be an issue if she passed at home, but as she will need the funds, I will have to sell the house when she moves. In order to keep things as simple as possible and as the house is already in my name as well, I plan to put the proceeds from the sale in my account and then private pay for the AL with those funds. I plan to keep very detailed records of what ALL of the money from the sale of her house was used for, and it will all go for her care. I am not keeping anything for myself. In that situation, IF Mom outlives the money from her house, and I am forced to move her into a NH and apply to Medicaid, will I run into any issues during the lookback period? Thanks in advance!

Find Care & Housing
contact a good Elder Care Attorney asap and they will help to protect some of the assets and also will help with medicaid when the times comes. make sure you tell the attorney everything so they know what they are dealing with. They will ask for certain things going back 5 years (I know, i just provided all this for our mother), that means bank statements (and ALL pages even if blank), etc. I wish you luck.
Helpful Answer (1)
Reply to wolflover451
Report

You don't specify when or how you were added to the deed. I agree with the others here that recommend consulting with a lawyer with expertise in Medicaid in your state. This would be a good last chance to get POA and other documents updated. If you plan on getting a new bank account, get the bank's preferred POA so you can have that notarized at the same time. Note that Mom will need to be competent to sign; dementia does not immediately equal incompetence; the lawyer will either find her ok to work with or not.

You may also need to ask some questions about taxes with another expert. A tax person can tell you if a gift tax return was required and what if anything can be done about it now; at least there was almost certainly no gift tax. If you put money or property back in your Mom's name, another gift tax return (not tax) will be required.

Capital gains taxes may be an issue. You will need to give the tax person your Mom's tax basis when she added you to the title and an estimate of what it might sell for. If Mom is still partially on the title, she will likely qualify for up to a 250,000 exemption on her share as an owner occupant.

Will Medicaid allow you to deduct sales expenses and capital gains taxes from the proceeds before returning the money to Mom? If not, would it be better to put it back in her name before sale?

In the meantime, remember to keep your liability insurance up to date, so anyone who sues you can't go after her property.
Helpful Answer (0)
Reply to Frebrowser
Report

Wait a minute. If the house is also in your name, only half of its value counts as an asset of your mother's. The AL cannot collect more than that.
If the deed was done five years ago or more (the Medicaid lookback period is five years), the same applies. You will not owe all the proceeds from the sale to either.
Talking to an elder lawyer is a good idea. Checking out AL facilities that also have upgraded care (an area that is a nursing home/memory care) might be a good idea too. This way you won't have to move your mom to a different facility if her care needs increase.
Helpful Answer (2)
Reply to BurntCaregiver
Report

Imho, you may want to retain an elder law attorney.
Helpful Answer (1)
Reply to Llamalover47
Report

Medicaid is administered differently in every state but if you were in NJ I would be screaming....... no,no,no..... put the funds in the funds from the sale of the house in a separate account! I learned both from my eldercare attorney and the Medicaid dept in Mercer county the problems that could result when a parent's income get mixed with their child. One issue we had for one resident was that the caregiver child became ill and needed to qualify for Medicaid and they (medicaid) saw that huge amount of money in the child's account that thought it was all hers and she disqualified herself and poor Mom was still left hanging!! Luckily we got it straightened out and because it was a county facility we could take the risk and work closely with Medicaid and the attorney but I'm not sure these profit driven facilities would do that these days when they are both hurting for profits and are highly understaffed.
Be safe.... open a new account in Mom's name (if you have DPOA, the bank should be able to guide you) and put the funds from the sale of the house in that.
Helpful Answer (1)
Reply to geddyupgo
Report

Propbably not if your records are perfectly kept but if I were you, I would open a Special Bank Account for this purpose only and not use your regular Bank Account.
Helpful Answer (1)
Reply to bevthegreat
Report

My feeling is ALWAYS that the safest way to manage finances is a checking account with LO’s name and POA(s) as well.

In my present caregiving situation, I’m also her designated recipient for her social security.

The checking account, accessible to both POA’s, is used for NOTHING except LO’s expenses, and is therefore an immaculate and unchallengeable recording of her expenses and the payments made for them on her behalf.
Helpful Answer (3)
Reply to AnnReid
Report

Do not run the proceeds through your account. Setup a separate account in mom's name for that purpose.
Helpful Answer (3)
Reply to gladimhere
Report

When I moved my mom in with me almost 3 years ago I sought the advice of an elder attorney. I opened up a checking account in both of our names. This was the account I had her Social Security go into . also any money that she had from her old bank was added to this account. She had several old small life insurance policies that I liquidated and the money went into that account. So I had about $25000. He told me to open up another checking account in my name and put about 20000. In it. The reason was in the event my mom would have to apply for Medicaid...after 5 yrs ..which is the look back period..Medicaid would not be able to take that money. BUT he said if Medicaid had to be applied for within the 5 years starting from the date I opened that account in my name..that I would need to put that money back into the account with both our names on it. Otherwise Medicare would consider that a gift from mom to me and She would be penalized so many months before she would be accepted for Medicaid. Also in the meantime...if she started running out of money in her main account I could take money from this 2nd account and transfer to her main account.
Then under his advice I opened up a 3rd account only in my name. He said I could charge her rent and this would also be money that Medicaid could not take. I had to have a realtor come in the house and assess her living space. He composed a letter stating what the fair market value was of her living space. He said it was $750 a month. So every month I had $750 transferred from her main account to this account. I stopped the transfer when I placed her in AL.
Medicaid told me when I get down to $5000 that She could apply for Medicaid but her hospice social worker told me yesterday to apply now to see if she can get preapproved. She has about $21000 and after that is gone she will have no assets.
You learn a lot on this journey.
Helpful Answer (4)
Reply to evander09
Report

This is a very slippery slope, I highly suggest seeing a CELA (certified elder law attorney) before doing anything. It would b better to have things set up and not have surprises at any point of the game.
You need to make sure mom is cared, but also need to make sure that you are doing what is right with the money that is hers and yours. I do know, if you are on joint accounts your money is her money and visa versa. TOD is good, but better safe than sorry. Please seek professional advice.
"it's easier to stop something from happening in the first place than to repair the damage after it has happened".
Helpful Answer (5)
Reply to thingsarecrazy8
Report

Trendi, it’s MedicAID that you need to be mindful of NOT MediCARE. It’s really super duper importante that you get a understanding of what they are, will pay for and especially NOT pay for. This site has several articles on the difference; really read & RE-read.

On the bank account, in my experience what will be an issue if Medicaid is applied for is IF her income and assets have been commingled with yours. If she has her SS $ direct deposited into y’all’s shared bank account, her SS# will be attached within the banking systems to the account. So the State can consider all in that account as hers. All $ hers in that account. If y’all share other accounts, who the owner is will be based on how the account was opened as to whose SS# it is linked to. Really you on your own can schedule an appt w a bank officer to review all of your & hers & joint accounts; this way you know precisely whose SS# is attached. Then later w mom in tow, u change what’s needed.

Right now having it this way makes it simpler for you to do, buy & pay for stuff. But can morph into a problem should Medicaid be applied for. Also SSA has issues with commingled accounts, if SSA somehow finds out, they can require that you become mom’s representative payee…. It’s a real butt rash to deal with as SSA does not recognize POA.

She should have her own freestanding checking & perhaps saving account. U can & should be a signature on them. & POD to you.

For my mom, she had accounts (2 w me as a signature) & with her sister, in all 4 banks! I didn’t really realize how unwieldy it was till we ended up staying at moms after Hurricane Katrina, it was just crazy amount of paper coming in every mo. The 1 w Aunt, she (ok me) sent a certified letter to bank, informing them she was removing herself from the account and surprisingly like 2 months later she stopped getting statements. She didn’t have to go in at all. We went together to close out 2 other banks … I think it was that they did a certified check to her about 5 weeks later (so time for any checks to clear). All the $ moved to 1 bank that got her SS $ and federal annuity direct deposit. Acct tied to her SS#, so she was the 100% owner but I was a signature on the account & it was POD to me. That’s were all closed out bank accounts $ went into & to the penny.
I opened my own checking acct there as well… I think this is important as it shows you are mindful of your own finances. Had all linked up on line & bank added moms CD notices as well. POA done with local attorney in her city, so no issues. Mom did need to sit in bank officer (was guy with the banks Trust Dept) to do the signature on paperwork (done in advance) on her own. They will ask her to affirm that she wants you added and you as her pay on death. My mom was still pretty competent and cognitive. But we did do role play Q&As in advance couple of times and mom went to the beauty shoppe the day before. We went early morning too when she was at her perkiest. She was used to the bank as well. It all helps them look competent and cognitive. If your bank has a Trust Dept, believe me, the guys that work this Dept are very used to dealing with old people & totally want things to work as easy as possible. Took maybe 30minutes.

Really no commingling should be happening.
Helpful Answer (0)
Reply to igloo572
Report

I’d suggest also that you open up a new account that gets all the proceeds from the house sale $. I would have it as a new checking account with both names on it and on the actual checks.

Not into an old account that is in your name and tied only to your SS#.

Having the $ go into your old account on the initial glance looks like gifting and really IMO you to avoid that red flag ever waving for Medicaid. The account should be POD / pay on death to you so should she die, the $ passes to you outside of probate. Again, should something happen to her and she passes unexpectedly, the $ if POd goes to you. It provides for the situation mom wanted to have happen by having your name added to the title.

Should there be costs to put it on the market, those are costs you need to think about as how to pay. Depending on when mom added you on and how long she is able to private pay for AL and if Medicaid does a 3 yr look back if they are private paying for a facility, you may find yourself in the unique position that there could be no gifting transfer penalty and there is still your 50% left in the account. If you have the wallet, I’d suggest that you each pay 50% of whatever expenses the house has from the day she moves out until it is sold. It establishes that you are a co-Owner and share property costs equally. So if plumber is $1890.50, each of you write a checks from your each individual bank account for $945.25. It helps establish that it is co-owned. Hopefully it’s not on the market long, so it keeps all costs to a minimum.

if the current tax assessor value seems to be whack, I’d suggest that you get it first inspected and then the inspection report goes to an licensed and registered appraiser. They will give you a report with their signature and seal. It is considered legal. So if the house appraisal comes in at below what the tax assessor has, the appraisal value overrides tax assessor. Even if it is significant. It gives you a legit way to sell at a lower price with no repercussions from Medicaid. If house is like lots of elders homes, it has decades of delayed maintenance, is not a new fresh renovation with granite countertops and rainfall shower heads like the comparables probably are. The tax assessor places value on recent sales, so I’d it all crisp new renovations, her homes value will be wrong.

Good luck in all this. Keep a ledger going and keep all receipts as well.
Helpful Answer (2)
Reply to igloo572
Report
Trendi Jul 7, 2021
Those are all really good suggestions, but if her name is on the account with mine, would the government then assume that my assets (including those not necessarily in that account) were hers too? Or would they only consider what is physically in that account? Mom is probably too “not of sound mind” to sign anything at this point. I wonder if a bank would allow me to create the account with her on it and a POD without her signature? It’s crazy to me how much you have to think ahead just to prepare for the potential of Medicare!
(0)
Report
Yes, opening a separate account is what you need to do. The house needs to sell at Market Value if Mom may need Medicaid within the next 5 years. So I suggest having an assessor evaluate it.

The reason for a separate account is because Medicaid asks for 5 years of bank statements. So keep her present acct ones too. By having a separate acct all that shows up on the statement is what has been spent on Mom alone. My Moms bank, for a small fee, included copies of her checks so the caseworker had them to refer to if he had questions what a check was written for. Do not "gift" any large amounts of money. When I paid out if pocket for something for Mom, I waited till the eom and reimbursed myself taking all the receipts, putting them in an envelope with a check number on the envelope. Yes, keep good records.

Mingling money is never a good idea. Also, any accounts Moms name is on is considered her money by Medicaid unless proven otherwise. My Mom was on my nephews acct and her lawyer suggested removing it because of Medicaid.
Helpful Answer (4)
Reply to JoAnn29
Report

I am sure you will get much better answers but..
I would first talk to an Elder Care Attorney.
My first gut instinct would be to open a different account so that the money from the sale of the house is not co-mingled with your assets.
Side comment though. With the diagnosis of dementia would Memory Care be a better option for her?
I would also talk to the Social Worker or Director where you plan on having her and ask if they accept Medicaid and how long would the person have to be private pay before Medicaid.
Helpful Answer (2)
Reply to Grandma1954
Report
Trendi Jul 7, 2021
Thanks for that suggestion. I hadn't even thought about contacting the NH to ask those questions, but I will most definitely do so. The AL community told me that they have many dementia patients there and they combine those services for those patients without a separate unit. They don't accept Medicaid of course, so I know I will have to move her to a NH before her money ran out. Thanks for the heads up on that. Also, that is an excellent idea about opening a separate account. Would you think I would need to have her name on that account as well or could I just open the account under mine however not add any of my personal assets to it? I want to keep it as simple as possible when moving funds and issuing payments. Thanks again.
(0)
Report
Ask a Question
Subscribe to
Our Newsletter