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As others have said, get good legal & professional advise. So much of this will be dependent on what your elder's health status is and how much time you all realistically have before he must go into AL or NH. The 5 yr look back is federally mandated for the states to participate in Medicaid, so no way around it. Now Medicaid is managed by each state, so what the specifics are for qualifying will vary from state to state. Keep that in mind, like some states recognize an enhanced benefit trust (Lady BIrd deed) but other states don't, as you don't want to do something that works in Iowa but not in your state.
2019 - that is 5 years from now. So where do you think dad is on his timeline?
If he is 90 and cannot do any of his ADL's and needs AL or NH like now, well you are limited in what you can do in a spend-down. But if he is 80 and just kinda forgetful but gets out and still cuts the grass, then you have 5+ years and can do more. Really have a come to Jesus moment to be realistic about the situation.
Best of luck & keep a sense of humor...Medicaid application is a maddening maze
About the 10large cashed, the state can require documentation on where the 10K was "spent". Yes if he goes to the casino and blows it all, then he or his family better have documentation to show the trips to the casino's otherwise he will face a transfer penalty for the 10K. Until the transfer penalty is either paid or the length of time is worked through, he will be unable to have the state pay for his NH stay. That means either family private pays the NH or dad stays with family for the entire penalty period.
If they live long enough, they will run out of funds unless they are generationally wealthy and everyday I am grateful that Medicaid and Medicare is out there for those that qualify like my mid90's mom. BTW for my mom's application, she had to provide for 3 years and 6 months of all of her finances. Front & back of all her bank statements, letter from bank officer on letterhead as to the disposition of each and every account closed for the look-back period. And all documents provided within a few days from the request or they will get denied as documentation not provided.
For example, let's say a very frail person has $200,000 in assets (home, cash, investments) and they are very likely to need to be cared for within the 5 year look back period. That's enough money to pay their own way. And, if the person's children really want to inherit their parent's money, then they have the option of providing the care themselves and preserving the estate. Medicaid allows for all sorts of 'spend down' strategies (pre-paying a funeral, for example). But, unless you want to get into the sticky situation of taking your parents money and then having that discovered during the look-back process, you'd best seek the services of an attorney.
Also, the Medicaid application process is extremely complex and full of red tape. It probably wouldn't have to be if there weren't so many people hell-bent on trying to hide their parent's money instead of letting their parent use it to pay for care. Isn't paying for care one of the reasons we save money for our old age??
People with plenty of money may or may not have worked hard to deserve it, but I promise you they have been LUCKY! Whether they got their first job from a friend of the family, or never got cancer, or never had a child with medical problems, or never lost their home in a tornado, or never had their job shipped off to China, they have been lucky.
The hard-working, frugal people you call "Deadbeats" have been unfortunate. Have you ever tried to live on the minimum wage? Every time you eat at McDonald's, you are exploiting some "deadbeat" who works two jobs with no health insurance so your Big Mac doesn't cost $10.
I'm in the category where I know my husband will outlive his assets, and need help from Medicaid. I'm going to be wise with my money so I can keep as much as I can, but I know that an awful lot will be paid out before then.
It is NOT a requirement for the government to provide free NH care for elders, any more than they pay our rent or food bills. The people like me, who have been lucky so far, need to pay what we can for our own care.