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My father has been in a nursing home since Feb of 2012 and on Medicaid since Dec of 2012. Since then he spent everything down but during the time between going in and getting Medicaid he paid his house mortgage. Once on Medicaid his house was given back to the bank due to the value and what he owed, about even. The nursing home has him owing $13,000 (time between Feb and Dec when he was under their care but not paying anything) and he has $2,000 in his bank. How can he spend that 2k with the 13k bill over his head? I'm POA and don't want any problems with the nursing home after everything. My father wants a new TV and give savings bonds to his grandchildren for birthdays but I don't know what I can touch.

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No bonds, because it does not lessen his asset count. So if he had even a small gain on the house, enough to go over the 2K limit, pay the nursing home before the end of the month that the money came in, or risk an interruption of Medicaid.
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There is a lot to digest here but no bonds were purchased just his desire.
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POA - also there could be some delayed tax issues with the house. You said Dad walked on his mortgage, right? If it was a foreclosure or a short-sell and there was a difference in fully paying off mortgage, Dad could get a 1099-C Cancellation of Debt from mortgage holder for the difference. It could come for the tax year he walked on it but could be due next year or so as the foreclosure process can take time. Sometimes the balance due $ is forgiven with no tax issues.

1099-C for those on medicaid are sticky in a couple of ways
1. as it is income, it is reported to IRS and has taxes due on it. If your state does a match up of IRS income for those on low-income entitlements, the 1099C will be a problem. The $ indicated in the 1099 will take them over income / asset levels for Medicaid. So Dad will have to file 1040 taxes & try do an IRS 982 filing to offset the "income". It is not a DIY project so you as DPOA will need to pay a CPA or good tax person to do them.
2. If you ignore it, the IRS as a supercreditor can attach dads SS income to pay towards taxes due. Problem is Dad needs that SS $ as under Medicaid rules dad must do his copay or SOC (share of cost) of his SS each month to the NH directly. If IRS attaches Dads SS, he will be out of compliance for Medicaid and then becomes ineligible if not worked out. Your DPOA it's your responsibility.

1099-Cs often happen for those that enter a NH and on Medicaid. There is no more $ to pay on these old credit cards, house expenses, mortgage, etc and they go into default; trigger collections and get a 1099-C when the original creditor finally writes off the debt.
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OK, let's say Dad has $10K in savings bonds. If they are gifted to the kids at $5K each, BIG trouble. You are in PA, which is a filial responsibility state. Whoever gets the asset get sued by the nursing home for the full amount they got. The POA is charged with misdirecting funds. Medicaid must be notified of ANY change of assets, including the sale of the house, savings bonds, cars, EVERY TRANSACTION or they cease payment to the nursing home. And who will the nursing home sue? They sue all the children at once and let the judge sort it out. See HCR v Pittas. It cost Mr. Pittas $93,000.
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I'm a bit confused. When you refer to a nursing home, I thought you might mean AL or IL, but if your father is getting Medicaid I assume he's in a skilled nursing facility or some level of long term care? If so, wouldn't the facility be providing a TV?

As to giving savings bonds to grandchildren, they have to take a back seat to the needs of your father for Medicaid assistance. I honestly don't know, but someone here will be able to advise what can be done with the $2k.

However, consider that your father's getting governmental assistance with his own financial needs for care, and it's not fair to be diverting from that for bonds for the grandchildren when he owes $13K.

If he has the funds to gift, he has the funds to be paying more for his own care.
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The NH needs to have the past due debt dealt with. This NH has been pretty accommodating to have left a 13k past due get overlooked now for years. Personally I'd pay them whatever dad has as his asset (2k max allowd by Medicaid). Someone in the family can by dad a TV for Xmas....

But there's a bigger issue.....The savings bonds are a HUGE red flag.

So were they all reported and listed as an asset when dad applied for Medicaid back in 2012? I'm going to guess NOT as they should have already been cashed out before he would ever be medicaid elgible

Old school savings bonds that are held are under the radar for Medicaid as they arent tied into current buying / reporting requirements.... .until they get cashed in..... and add to this that nowadays most banks do not & will not ever do savings bonds cash outs at all. So dad or the grand kids will have to go to the Feds to get any $. And once that's done, it will get back to Medicaid as it will be tied to his SS# if he owns the bonds. If he becomes ineligible for Medicaid, that 13k will be
peanuts to the whole debt owed to the NH from Feb 2012 till now.

? for you....Dads Medicaid application took almost a year to process. So what were the problems? There were some sort of issues to have such a delay. How was it that those bonds were not reported? Who did the Medicaid application?
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