RMW (req. min. withdrawal) auto-deposit into checking from an inherited annuity already started. Too late to shield this asset?

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5 days after mom's inherited annuity for 30k started paying out the required minimum of 3.8k, mom received this letter: STATE OF COLORADO "When you first applied for Health First Colorado you gave the Dept of Health Care Policy and Financing permission to use any data sources and interfaces to verify your info. Beginning Dec 2017 we will be using a new data source that will verify liquid assets in financial institutions (e.g. savings and invstmts) such as banks, credit unions, etc. I understand the Dept Will continue to get this info about savings and invstmts in my bank accounts until I no longer qualify for benefits, or I tell the Dept of HCP and F'cing in writing that it can't collect this info anymore. I understand that if I take away the Dept's permission to collect this info, I may no longer qualify for Health First CO programs that require this info. " My sister was ill, and recognized that mom needed the money to get out of her second-hand smoky subsidized apt, so killed herself so mom could move. (Not collection on accidental death insurance, just sister's retrmt) We intended to cash out the 30k as soon as we found decent house we could afford to buy. We felt safe waiting, bc we forgot that we didn't choose the option in which you get small increments every month, but the one in which you get a large sum at end of year. We thought it was that the small increments started at end of year. Then like a bomb, . . 3.8k shows up in her checking ! Then she gets this letter ! Mom raised 2 daughters alone and struggled financially for 47 yrs. She has COPD, not from smoking, but from breathing strangers smoke, and mold, in housing for 14 yrs. She has a fighting spirit, and a great attitude, but, . . we were both too stupid to know how to shield this asset, and want to know what to do now ?! Can't live with me. I have a roommate. I will live with her in the house, and make the mortgage pymts. She will have a garden. She will breathe unshared air, . .not attached to others.

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I agree you need to consult with eldercare attorney that specialize in medi-caid in your moms state.
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I'll repeat that you need to consult an eldercare attorney familiar with the Medicaid regs in mom's state. Legal fees are legitimate use of mom's funds.
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We thought if she bought a house before the rmd began, she would shield the whole amt. We thought if it didn't touch her bank acct., . .not realizing that it must, in order to cash it, . .can't just sign it over to lending institution that mortgage will be through.
Probably better would have been, to have taken the small monthly pymts thru out year, than lump pymt at year's end. Either way, didn't buy house fast enough, and may not have benefited anyway.
Medicaid will let her quit housing, and purchase a house w /me, won't they ? Just read that it's acceptable to have car, and, house. Does she have right to exit her horrendous housing, that hurts her health,and get detached house where she can breathe free of mold, smoke, and outgassing rubber ? I will make monthly mortgage pymts., live w her. Both names on mortgage. 10 yrs later, she goes NH,. .then I am not forced to sell house, right, bc, I have paid a lot ? When I want to move to another house, then, I may have to pay out a bunch of equity, I am guessing, like a lien for NH ? So, I better never move. (?)
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I'm confused.

Are you saying that you were trying to shield the entire 30K?

Did you realized that mom needed to make yearly RMD's each year? Is that where the issue came up, that you wanted the RMD's distributed throughout the year? Or did mom recently turn 70 1/2 and need to take an RMD immediately?

Quite frankly, I'd use the 3800$ to book a consultation with a certified eldercare attorney who understands Medicaid in mom's state. You need good solid advice and guidance.
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No such thing as shielding assets. This money will need to be spent down before being Medicaid eligible. Spend down for things she needs.
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