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To allow my mother to remain in her home, my daughter and I and my older sister live with her in her home. I am her full time, unpaid caregiver and have been for 7 years. My sister and I each pay her $300 a month to cover bills, utilities, taxes, insurance, etc. We also pay for groceries and our own personal items. Mom has a small savings that has been left in tact by us paying her rent each month otherwise it would be gone by now and she would not be able to live in her house.

Since I am not clairvoyant I do not know how Mom's health will hold up and I am concerned that it could take a turn for the worse and she may wind up needing to go into a nursing home. I was already told by one doctor that I needed to put her into a nursing home as I could not handle her alone, but medication was a life saver for us and she is home with us. If that happens she will wind up needing the assistance of Medicaid as I am disabled and do not have the finances to cover her care.

There is always talk of a spend down or penalty if a person has too much money when the time comes to need a nursing home. Would it be better if we let Mom pay the bills now as she will be basically doing her spend down? I do not see why we are paying the bills now so she can hold on to her savings, if Medicaid is going to require that she spend it anyway before they will help her!

It feels like we are falsely keeping her afloat and Medicaid if needed will want it all spent anyway.

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What state do you live in?
This rule applies in every state that I am aware of, you may want to check yours:
If a personal residence is transferred to a child caregiver, and if the caregiver lives in the property and provides caregiving services that would prevent the elder from requiring nursing home care for a period of least two years (prospectively, not perspectively), the transfer will not be considered an uncompensated transfer and therefore not a penalty inducing transfer.
Yup, you read that correctly.
Given the circumstances, then, you would be well advised to have the property transferred to you sooner rather than later to get the two year clock ticking.
Keep careful records as to the caregiving services you are providing (maintain a "care log".
Try to get verification by non-interested third parties that you are providing such services.
Get in writing the advice of the physician who told you mom needed to be placed.
If mom does need to be placed before the two years expires you can always transfer the property back to her and it would then be an exempt asset as a homestead residence.
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I am also confused. Why would you have to pay rent? Your mother's savings should be used for her care. I have been thru this also. Why are you worried about your Mom's coffers? You are doing a wonderful thing keeping your Mom in her home and should be valued for it and properly reimbursed if possible. If it comes down to a state run nursing home she is going to have to spend down anyway. So if you are planning to keep her in her home for the long haul protect yourself and your assets.
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Not sure if this helps but over two years that Mom was in AL, my sister and I covered some expenses to stretch Mom's money. Cell phone bills, medication, clothing etc. In some cases, she wrote reimbursement checks (which I didn't cash), in others she didn't. She needed NH last year and suddenly we were in spenddown and I was so afraid of gumming up the works with a check to reimburse myself for my OOP. So I let the money go. And after buying Mom clothes and stuff she needed, the rest went to the nursing home. The elder care attorney I talked to said that if I was concerned about keeping the money (reimbursement) for her needs, I should've cashed the checks along the way and put the money aside for her care later.
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Jnine - your parents have some sort of income. They get SS and perhaps also a retirement I would imagine. They can pay your for providing caregiving to them. BUT if you do this, it needs to be done properly as a "personal services contract" that details what they are paying you for, and for whatever is considered fair wages in your area. They issue you a W-2 and you pay taxes on the income, so it is a real job, with real wages and builds up your own SS benefit base too. If you don't do this and later on they need to go into a NH and apply for Medicaid, the payments to you can be viewed as "gifting" and decline their application.

But if this is the case where the level of caregiving is just to the point where you cannot provide the care needed and your parents just do not have the income to be able to pay for outside care or to pay you, then what happens for most is that apply for Medicaid to pay for either placement in a facility (either a NH or AL if your state does a AL waiver program) OR for community based care for them in their home from a health or wellness provider.
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Wow. Ralph's answer, as I read it, leaves me confused. Most particularly his parenthetical insert of "prospectively, not perspectively". As for the "perspectively", I believe that means you cannot claim the two year period of caretaking because YOU THINK SO. That it must be verified by a doctor that the patient needed to be placed and that the family member's caretaking in the patient's home for the two years prevented the State from having to incur those costs.

However, it is the use of the word "prospective" that bothers me because generally in law that means "not retrospectively", so, in the future, NOT in the past. From research, information and personal experience, I was under the impression that the two year period was tied to the medical opinion of when the patient would have needed facility placement and NOT to the date in which property title was transferred. If this is the ONLY option, it is concerning especially when, as in Raven's situation, there are siblings who may object or there is a trust, which by law becomes irrevocable upon the declaration of the incompetency of the Settlor.

Perhaps the clicking clock is not only tired to a title change, but also, as I thought, to the State's MERP recovery protocol and that family members who are living in the house, and who did the caretaking, have an opportunity following the death of the patient to file for relief of recovery based on the two-year caretaking requirement (although I always believed that they're also needed to be proof in the patient's medical records that they could no longer live at home alone).

So, which is it? Have we all been merrily rolling along on the wrong beliefs and it is ONLY as Ralph says? OR is it both?
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CarolLynne: All I know is I am more confused than I was before I asked the question! Thank you all very much for your answers I need as much help in figuring this out as I can get!
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I quit my job a year ago to take care of both my parents are there any programs to pay me instead of in home care. They do not have the money and I am running out of mine.
Thank you,
Jeanine
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If you are taking care of her you can use her money to pay rent without be penalized by medicaid once she has no choice to go in a nursing home. Be honest what you use the money for and u will be fine. Dont buy thing in excess of 1000.00 or your mom will be penalized come medcsid approval time.. I am doing what your doing now but its only me and I have my own apt but I cant care for her and me especially when Im not a paid caregiver. Dont be sneeky and use your morals. U should be all benefiting from moms money. Thats greed! If they helpthen the rent pay is ok but anything besides food will be pushing it.
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You do not have to pay rent, you are her uncompensated caregiver.
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Yes, Medicaid if needed will want it all spent on her care anyway.

If Mom had had a live-in caregiver (and a backup to cover her time off) for the last seven years, what would that have cost her? Believe me, the professional caregivers would not have been paying her rent.

It does not make sense to me for family caregivers not to get paid, to the extent that the parent can manage that. Maybe payment is just room and board and a small allowance. Maybe it comes close to what a professional would cost-- it can vary all over the place, but a family caregiver should be paid, to my way of thinking. That just seems fair and reasonable to me.

When you throw in the possibility of needing Medicaid, that is another practical reason for Mom to pay her own way. Otherwise the picture painted by her application is not an accurate reflection of what it should actually have been costing her to live -- it reflects the charity of one or more children (who did not, by the way, get to take it as a charitable deduction). Mom needs a caregiver. Why shouldn't she pay for that, if she can?
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