Mom, Medicaid, and will she lose her house?

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Remster
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Mom, Medicaid, and will she lose her house?

Post by Remster »

Hello,

Mom, 81 years old, resident of Ohio, had an "event," hospitalized, and ended up in a nursing facility, got cut from Medicare because she wasn't improving fast enough with PT/OT, is now self pay at $236 a day. She has about $2600 a month income from Social Security and a life annuity (was dad's pension). Medicaid income cut off is $2532 so the facility wanted her to start a Qualified Income Trust (QIT) or Miller Trust to reduce her income below the threshold. She owns her own home and owes about $24,000 on an equity line. I am supposed to inherit the house but it's not protected by a trust or anything if she ends up on Medicaid. The house is worth about $289,000 on last appraisal and I would like to keep it in the family (it is a 40 acre farm.) She has a $20,000 life insurance policy the facility wants her to cash out to reduce her assets below the $2000 threshold. No other tangible assets. Long term care insurance would be about $5000 a month at her age, it's best to start that between 60 and 65 to lock in a lower rate. Her plan was to die suddenly from some unknown medical condition to avoid all of this.

Dad passed away in 2005 and gave her a lifetime pension of $415 a month from his factory job. I do have a brother and sister in law who were given many "gifts" from mom over the years which is why I am the only one to inherit the home. She could have gifted me the home or sold it at a reduced rate years ago but kept saying how she wanted to sell it, reverse mortgage it, etc. I have thought about purchasing it but my average income is around $55k though right now I have a good contract job which should last another year that effectively triples my income. But me buying the house and footing the bill for her care lets my brother and his wife enjoy their "pre-inheritance" while I pay a mortgage.

She can still manage her own medications but it doesn't seem that she will be walking again. Before the event she was home with me and a home health aid for assistance. I don't live with her but I have been helping her 3-4 days a week for the past 6 years. Medicaid would require I actually live in the home for the past 2 years to have it not counted as an asset. I did not move in with her because she hid the fact that 6 figures of dad's retirement went towards my brother for over 10 years yet he only comes over to help for about 2 hours every other week. All her other relatives live in Canada and the last time they visited they went through the house and took valuables (stamps, jewelry) and told her "well you are dead already" when she asked why.

Oh and I understand that she should burn through her assets to pay for her medical care instead of being a taxpayer burden even though she has been paying into Medicaid for the past 60+ years. She even has a Medicaid deduction on her Social Security.

Please advise or if you need any further information let me know. Thanks!
Last edited by Remster on Tue May 10, 2022 3:42 pm, edited 2 times in total.
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PaunchyPirate
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Re: Mom, Medicaid, and will she lose her house?

Post by PaunchyPirate »

I would hire an elder care attorney who knows the Laws of the State she lives in. The consultation will be well worth the money.
brawlrats
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Re: Mom, Medicaid, and will she lose her house?

Post by brawlrats »

IANAL, but at this point, given the five year look back period for Medicaid purposes, you are likely out of luck with gifting the house or moving it to a trust.

Is your mom married and, if so, does her spouse live in the house? If yes to both, there are community spouse rules that allow him to stay in the house without the house counting as an asset for Medicaid eligibility purposes.

If there is no spouse in the house, you are in a tough situation that will require the house to be counted as an asset and spend down will be required for being eligible for Medicaid.

If you want to keep the property, you could purchase it from her (at FMV so Medicaid doesn't consider it a gift in anyway) and then use the proceeds from the sale for her care. At $236 per day, $265K of proceeds would cover about 3 years of care at the nursing facility. If she were to pass away before the funds are exhausted, you would potentially inherit some or all back (not knowing if you have siblings or other family members in her will).

Given her ability to manage medications, she may be able to step down to a medical-level assisted living facility, which could lower the monthly cost, but you'll need to check with each ALF to determine whether they would admit her.

This is a very tough situation. My mom went through it a few years ago with her parents, and the house had to be sold in order to pay for care and to allow for Medicaid eligibility.

You may want to consult with an elder care attorney, but again, it may be too late to do much in terms of saving the property without a cost to the family.
ekid
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Re: Mom, Medicaid, and will she lose her house?

Post by ekid »

" got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
MathWizard
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Re: Mom, Medicaid, and will she lose her house?

Post by MathWizard »

ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Medicare only covers nursing home care for rehabilitation, not for long-term care.
The max covered stay is at most 100 days, and that is not full coverage, but you
must be showing improvement. The idea is for people who are in rehabilitation, who
would otherwise be in a more expensive setting, like a hospital,

Some people buy LTC insurance, some self-pay, and others get Medicaid.
brawlrats
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Re: Mom, Medicaid, and will she lose her house?

Post by brawlrats »

ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Jimmo v. Sebelius was supposed to put an end to the "improvement standard" for Medicare skilled care in nursing facilities. Unfortunately, even though the plaintiff was successful in arguing against the improvement standard, many providers still cut residents from a skilled stay if they aren't improving.

https://medicareadvocacy.org/jimmo-v-se ... provement/
ChrisC
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Re: Mom, Medicaid, and will she lose her house?

Post by ChrisC »

Remster wrote: Tue May 10, 2022 1:28 pm Hello,

Mom, 81 years old, resident of Ohio, had an "event," hospitalized, and ended up in a nursing facility, got cut from Medicare because she wasn't improving fast enough with PT/OT, is now self pay at $236 a day. She has about $2600 a month income from Social Security and a life annuity (was dad's pension). Medicaid income cut off is $2532 so the facility wanted her to start a Qualified Income Trust (QIT) or Miller Trust to reduce her income below the threshold. She owns her own home and owes about $24,000 on an equity line. I am supposed to inherit the house but it's not protected by a trust or anything if she ends up on Medicaid. The house is worth about $289,000 on last appraisal and I would like to keep it in the family (it is a 40 acre farm.) She has a $20,000 life insurance policy the facility wants her to cash out to reduce her assets below the $2000 threshold. No other tangible assets.

She can still manage her own medications but it doesn't seem that she will be walking again. Before the event she was home with me and a home health aid for assistance. I don't live with her but I have been helping her 3-4 days a week for the past 6 years. Medicaid would require I actually live in the home for the past 2 years to have it not counted as an asset.

Please advise or if you need any further information let me know. Thanks!
I'm not sure your brief summary of the caretaker exemption for a child taking care of a parent for two years is completely accurate. I know in other states, like NY, this exemption allows the parent to transfer the home to the child free of spend-down and look back requirements for Medicaid eligibility. IOW, if you lived with mother for 2 years in mother's house and provided some of the custodial care for mother, then mother could simply transfer the house to the caretaker child without accounting for the house as a resource for Medicaid -- no asset and no look back for the transfer.

I'd imagine if mother moved back into her house and you moved in with her, and continued to help her out with assistance from the home health aid for 2 years, that you might qualify for the child caretaker exemption. It seems a bit unfair that you helped mother out for the last 6 years, 3-4 days a week, and fell outside of the child caretaker exemption because you didn't take steps to move into mother's house. Of course, I don't know what moving into her home would have entailed for you and your mother, but the rules are the rules for the exemption.

Here's a general discussion of the exemption: https://www.payingforseniorcare.com/med ... -exemption
Last edited by ChrisC on Tue May 10, 2022 2:46 pm, edited 1 time in total.
ekid
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Re: Mom, Medicaid, and will she lose her house?

Post by ekid »

MathWizard wrote: Tue May 10, 2022 2:33 pm
ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Medicare only covers nursing home care for rehabilitation, not for long-term care.
The max covered stay is at most 100 days, and that is not full coverage, but you
must be showing improvement. The idea is for people who are in rehabilitation, who
would otherwise be in a more expensive setting, like a hospital,

Some people buy LTC insurance, some self-pay, and others get Medicaid.
OK, I was thinking something entirely different.
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Re: Mom, Medicaid, and will she lose her house?

Post by Dottie57 »

brawlrats wrote: Tue May 10, 2022 2:38 pm
Onlineid3089 wrote: Tue May 10, 2022 1:57 pm I would argue that the home/land should be sold off at fair market value to pay for her care before those costs are shifted to the tax payers.

To put it another way, why should the tax payer be expected to pick up the tab for someone who is sitting on over a quarter million in assets?
From a taxpayer perspective, yes. And in this situation, its likely unavoidable.

However, proper planning years in advance of a need for Medicaid is no different than any other legal estate planning designed to maintain assets within a family.
LTCi. Is expensive which is why more don’t use it. And of course the belief that they will never need it.
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Remster
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Re: Mom, Medicaid, and will she lose her house?

Post by Remster »

Hi all - updated the main post with some answers as to why things are the way they are today.
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HomeStretch
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Re: Mom, Medicaid, and will she lose her house?

Post by HomeStretch »

You have received good advice. The best advice was to consult soon with an experienced eldercare attorney in her state.

The facility might be giving her good advice but it’s not a substitute for good legal counsel.

Medicaid varies by state. One way to help spend down the assets is to prepay for burial arrangements.
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JoeRetire
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Re: Mom, Medicaid, and will she lose her house?

Post by JoeRetire »

Remster wrote: Tue May 10, 2022 1:28 pmHer plan was to die suddenly from some unknown medical condition to avoid all of this.
I know people who profess to have the same plan. Not much of a plan, IMHO. It's really just an excuse for not planning.
Oh and I understand that she should burn through her assets to pay for her medical care instead of being a taxpayer burden even though she has been paying into Medicaid for the past 60+ years. She even has a Medicaid deduction on her Social Security.
Everyone "pays into Medicaid". Medicaid is for people without assets. You mom isn't quite there yet.

You could talk with a lawyer versed in elder care. But it may well be too late to "shelter/hide" any of her assets from Medicaid.
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ChrisC
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Re: Mom, Medicaid, and will she lose her house?

Post by ChrisC »

If it's OP's mother's intent that OP inherit the house, I hope there is either a Will, Life Estate Deed, or Transfer on Death Deed that reflects that intent, aside from potential coverage under Medicaid if LTC becomes necessary in a skilled nursing facility. If there isn't any documentation for this intent, an elder care or estate lawyer should be consulted, immediately. If mother's wishes to die from some unknown medical condition were to occur, isn't her home the best place for that to take place, assuming she has ample care? From what OP has reported, mother appears more likely to need assisted living help than skilled nursing care -- as the major impairment identified appears limited mobility (she might be wheel chair bound) though this would morph into bathing and transferring limitations. I think having her stay at the OP's house for care until mother needs skilled nursing care, makes it easy for everyone, except the OP. And I'd imagine that this is already taking a toll on the OP's own health, mental and physical, and no good deed goes unpunished!

As to the Medicaid issues looming down the road if mother needs LTC in a skilled nursing facility, I don't think anything is lost by moving mother back into her house and having that home serve as the center for providing her appropriate care for now. The OP can assess whether she wants to make a run for the child caretaker exemption. But as currently situated, I would orchestrate the highest level of affordable paid home care available to mother (solely using mother's resources) and provide her with as much personal back-up care as I could -- all in mother's house (and perhaps this might motivate the other sibling to step up his own care role).

I would look into social services available to OP and mother for home care; as well as possible care home placements (normally small residential facilities limited to 6 residents that are less institutional than skilled nursing facilities, but then again many of the care homes in my area require some degree of independent mobility). This is a tough situation; hope it works best for the family.
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Re: Mom, Medicaid, and will she lose her house?

Post by Northern Flicker »

PaunchyPirate wrote: Tue May 10, 2022 1:45 pm I would hire an elder care attorney who knows the Laws of the State she lives in. The consultation will be well worth the money.
+1 Don’t do anything before consulting an elder care attorney. Ultimately, Medicaid laws are designed to have public resources cover someone’s long-term care needs after their own assets are depleted. What assets can or can’t be protected from the spend down process is state-specific, which is why an elder care attorney licensed in your state is a better source of info than bogleheads.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
Agent 99
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Re: Mom, Medicaid, and will she lose her house?

Post by Agent 99 »

brawlrats wrote: Tue May 10, 2022 2:35 pm
ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Jimmo v. Sebelius was supposed to put an end to the "improvement standard" for Medicare skilled care in nursing facilities. Unfortunately, even though the plaintiff was successful in arguing against the improvement standard, many providers still cut residents from a skilled stay if they aren't improving.

https://medicareadvocacy.org/jimmo-v-se ... provement/
It’s a shame that this is still happening. I appealed a friend’s denial of care who also went self pay in the same situation. First I had to appeal twice to insurer and then to a Medicare Administrative Law Judge. I cited Jimmo v. Sibelius and followed the appeals guidance from an advocacy website. It took a while and didn’t happen overnight but we won and lost. The Judge agreed that the denial was wrongly attributed to lack of progress. My friend won one day of selfpay care because after he reviewed the activity logs from the facility he found that they decreased her therapy sessions below the medicare required daily hours. I should have caught this but my friend’s husband didn’t get me the paperwork in time to review before the submission deadline.

If mom is still in the facility and there is a chance to appeal this make sure that she is receiving the Medicare number of hours for reimbursement.

Feel free to private message me if you want to explore the appeal.

Like others recommended consult with an elder care attorney as soon as possible regarding the Medicaid, housing questions.
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Re: Mom, Medicaid, and will she lose her house?

Post by BarbBrooklyn »

ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Not "cut off from Medicare".

Rather Medicare stops paying for rehab when the patie t plateaus or refuses therapy.

One can appeal those discontinuations.
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Agent 99
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Re: Mom, Medicaid, and will she lose her house?

Post by Agent 99 »

BarbBrooklyn wrote: Tue May 10, 2022 7:01 pm
ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Not "cut off from Medicare".

Rather Medicare stops paying for rehab when the patie t plateaus or refuses therapy.

One can appeal those discontinuations.
Most likely she has a medicare advantage plan and it is the insurance company that denied the service. The basis for continued therapy even without improvement is medical necessity determined by treating physician.

From my brief to the Administrative Law Judge:

According to Jimmo v. Sebelius Settlement Agreement (January 2014) ruled that the "no improvement" standard shall not apply to the need for skill rehab services in SNF and IRF. Humana has based their denial on the lack of benefit rather than on the treating physicians determination that Mrs. X needed to continue SNF care.

As CMS states in the Transmittal announcing the Jimmo Manual revisions:

No “Improvement Standard” is to be applied in determining Medicare coverage for maintenance claims that require skilled care. Medicare has long recognized that even in situations where no improvement is possible, skilled care may nevertheless be needed for maintenance purposes (i.e., to prevent or slow a decline in condition). The Medicare statute and regulations have never supported the imposition of an “Improvement Standard” rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition. Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves. The manual revisions now being issued will serve to reflect and articulate this basic principle more clearly.
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Re: Mom, Medicaid, and will she lose her house?

Post by arcticpineapplecorp. »

Remster wrote: Tue May 10, 2022 1:28 pm I do have a brother and sister in law who were given many "gifts" from mom over the years...

I did not move in with her because she hid the fact that 6 figures of dad's retirement went towards my brother for over 10 years yet he only comes over to help for about 2 hours every other week. All her other relatives live in Canada and the last time they visited they went through the house and took valuables (stamps, jewelry) and told her "well you are dead already" when she asked why.
this is a major red flag. if you wind up applying for medicaid there are gifting rules that go back over the lookback period (last 5 years) so if she gave assets away during the lookback period, she could incur a penalty unless there is good reason to allow these gifts. Please be upfront about any/all gifts or money taken by family over the past 5 years when consulting an elder law attorney. These transfers will be found because you will have to verify assets over the past 5 years and will be questioned where money was going.
Remster wrote: Tue May 10, 2022 1:28 pm Oh and I understand that she should burn through her assets to pay for her medical care instead of being a taxpayer burden even though she has been paying into Medicaid for the past 60+ years. She even has a Medicaid deduction on her Social Security.
medicaid is not an entitlement prorgam like social security and medicare. It is an eligibility program. You only get medicaid if you're medically and financially eligible, not because you paid into the system like SS and medicare.

and one doesn't pay into medicaid per se. There is no medicaid deduction on her social security. You're probably referring to medicare deduction ($170.10 per month) for part B which is deducted from social security.

the fact that you are confusing medicare and medicaid is a good enough reason (along with her assets and the gifting done over the past 5 years) to get an elder law attorney if you plan on applying for medicaid at all.
Last edited by arcticpineapplecorp. on Wed May 11, 2022 6:50 am, edited 1 time in total.
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water2357
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Re: Mom, Medicaid, and will she lose her house?

Post by water2357 »

Agree with above poster, interview several elder care lawyers and choose one you think you can best work with. Some are only interested in setting up plans to "hide" assets through e.g. annuities. Instead choose one who really knows the rules on Medicaid and the various types of care that are available in your community, whether that is in home care or care in a facility and how to go about getting into a good facility and how to preserve what assets you can through legitimate means, such as setting up an irrevocable trust for funeral expenses before applying for Medicaid and taking the allowed (at least in PA) $500 per month for the care you provide or to later provide for your mother's noncovered expenses like clothing.

As for the house, you really need to get working on this immediately with the elder care attorney. I've seen this work in at least two cases, one where the child moved in with the parents to provide care but still had another mailing address and one where the child lived with the parents for sometime and provided care and had no other address. You will need some documentation from doctors, neighbors, other professionals that you provided substantial care.

And you really need that attorney to look over all documents that need to be signed, particularly those from any care facility. REMEMBER, the care facility's only interest is in that they get paid the maximum payment they can get, they DO NOT have you or your mother's best interests in mind when it comes to money. And don't you ever sign any documents as yourself, if your mother can't sign, then you would need to sign as her Power of Attorney. And strike out the arbitration clause in any contract.

And as stated by the other poster, those "gifts" to your sibling and those things that were taken from your mother's home will be part of the inventory of gifted items/money that Medicaid will be looking at in the 5 year look back to see if your mother qualifies for Medicaid. If those items/money were given/taken in the 5 years prior to her application for Medicaid, Medicaid will expect those items/money to be repaid. So, you better get the attorney to go after those relatives to get the items/money back. Becasue your mother will be shut out of Medicaid for the time period that those items/money would have been able to be used to pay the Long Term Care facility. It also sounds like possibly some of the items/money were more or less stolen from your mother, so that may require working with law enforcement as well as the attorney to recover those items, that is elder abuse as well as theft.

Lots of issues here, you need to think about what is doable and most important. But setting up trust, etc. for the benefit of a care facility is not something that anyone should do because the facility tells you to. You should only be doing what your and your mother's attorney says you need to do to get her eligible for Medicaid and to preserve what you can of her property/finances for her noncovered expenses and to reimburse you for the care you provided.

Good Luck.
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Remster
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Re: Mom, Medicaid, and will she lose her house?

Post by Remster »

Thanks everyone. I always get Medicare and Medicaid confused so sorry about the rant. Just very frustrated. Now to some of the questions:

My dad passed without a will in 2005 with roughly 1 million dollars in stocks, IRA, and 401k. Some stocks he owned were Microsoft, Google, etc. Mom was $120,000 in debt with her business so she used his money plus $200,000 more to keep it going for another 7 years (my brother worked there as the manager.) My brother and I got equal gifts of 10,000 in 2006 and 2007. I got nothing after that. I remember my mother saying "the balance keeps going up!" at that time.

In the beginning of 2008 I saw her/dad's portfolio and realized everything was high risk and told her to move the money to safer assets if she could. She says she started 2008 with 800,000 and ended with 332,000. When I asked her why she didn't just pause and wait for the recovery she stated "I made promises." By 2012 dad's money was gone and in 2013 she took an equity line out on the house and sold her business for a net personal loss of 300,000 but received 300,000 cash. I am not sure what happened with that money other than "there were bills." So the last time she gave any amount of money or gift is probably 2015-16. I only found out about the "gifts" (she calls it a loan) because in 2019 she had a stroke and thought she would pass and I would lose half the house to my brother so she wrote a letter (on her deathbed) about all the money that had gone his way and what it was intended for. After she recovered she re-did her will so I would inherit the house first then everything that is left would be divided equally.

The house is the family farm, 44 acres. Mom and dad bought it in 1978 for roughly 75,000 as a fixer upper. As children my brother and I tore down lathe and plaster, ran wiring, dug drainage ditches, cleared rocks from the field, etc. Currently we are leasing it as pasture.

Current assessed value is $279.000 so she is looking at 200,000 in capital gains if she sells to whomever. I am guessing if she goes on Medicaid she would have to spend down that money first and then they would renew coverage? Or the facility was talking about starting a Qualified Income Trust (QIT) or Miller Trust which would lower her income to qualify. From the numbers I have seen she makes about 70 too much a month to qualify for Medicaid but that trust can help with that but when she dies what money is left goes to Medicaid and she can't get what income (SSI, annuity) back once it's in the trust. I am no expert on Medicaid (obviously). I asked my brother and SIL to help but they don't care, they don't want the farm. Their house is worth 3-4 times mine. Everytime I talked about moving mom would say "take me with you" or "I am leaving you the house, don't make any big decisions."

Thanks for reading and commenting.
Last edited by Remster on Wed May 11, 2022 12:37 pm, edited 1 time in total.
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SuzBanyan
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Re: Mom, Medicaid, and will she lose her house?

Post by SuzBanyan »

As to the house, you wrote: “The house is the family farm, 44 acres. Mom and dad bought it in 1978 for roughly 75,000 as a fixer upper. As children my brother and I tore down lathe and plaster, ran wiring, dug drainage ditches, cleared rocks from the field, etc. Currently we are leasing it as pasture.

Current assessed value is $279.000 so she is looking at 200,000 in capital gains if she sells to whomever.”

As long as your mother sells the home while living in a licensed facility like a nursing home or living in the home, she will be able to reduce her taxable gain by $250,000. So it’s likely there will not be capital gains on the sale of the house if that is the direction taken.

In calculating your mother’s income, have you included the rent on the pasture?

Does you mother have a will? Durable power of attorney for health care?

You will really need to meet with a qualified local attorney to understand your mother’s options.
mnnice
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Re: Mom, Medicaid, and will she lose her house?

Post by mnnice »

OT

Language pet peeve. What ever happens your mom isn’t loosing the house. Everyone still knows where it is. :wink: She is selling it to pay for something else (long term care in this instance).

My FIL uses the expression “lose the land” when any neighbors or relatives sells ag land. Sometimes people get foreclosed on but mostly the just wanted to use the capital on something else.

Edit spelling 8-)
Last edited by mnnice on Wed May 11, 2022 1:28 pm, edited 1 time in total.
Katietsu
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Re: Mom, Medicaid, and will she lose her house?

Post by Katietsu »

First and foremost, you need help understanding the options. The details are confusing for almost everyone. Also, it is concerning that you have made some statements about basic information that are incorrect such as thinking Mom had medicaid taxes deducted from her paycheck (as opposed to Medicare) and thinking Mom would owe taxes on capital gains from a sale. This is not meant to be critical just to make you aware that you need to get facts from someone more experienced with this topic.

In order to make the best decision, you need to look at where it all stands now not what might have been. Forget about any possible mismanagement by Mom or unfair gifts to brother. I have no idea whether either of these occurred but I do know that thinking about it will not address the problem you are trying to solve now. Deep breaths. This is very stressful.
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ResearchMed
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Re: Mom, Medicaid, and will she lose her house?

Post by ResearchMed »

mnnice wrote: Wed May 11, 2022 12:36 pm OT

Language pet peave. What ever happens your mom isn’t loosing the house. Everyone still knows where it is. :wink: She is selling it to pay for something else (long term care in this instance).

My FIL use the expression “lose the land” when any neighbors or relatives sells ag land. Sometimes people get foreclosed on but mostly the just wanted to use the capital on something else.

spelling pet peeve. :wink: :wink:

(Sorry!)

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Remster
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Re: Mom, Medicaid, and will she lose her house?

Post by Remster »

The lease income is $3200 a year which she uses to pay the property taxes and it is properly reported on her income taxes. If she had to reduce income to meet Medicaid eligibility she could put dad's $415 pension/annuity into the QIT which would then go to Medicaid to pay for her care.

She also has a $20,000 life insurance policy (tho it might be much lower now) that she would need to sell to reduce her assets to the $2000 threshold. I am Durable POA and am trying to get more information about it. I am also Healthcare POA and I have her living will. I am also executor of her estate.

I view the farm as a personal "loss" to me, possibly not a loss to her or others as it is an asset like any other asset. I would be losing access to the land and be left with nothing more than memories. We also planted 10 acres of black walnut trees 40 years ago to partially fund retirements - this was dad's idea.

I posted here because I lack knowledge in this area and have not done anything like this before. Dad died peacefully (we hope) two years after he retired while watching TV at home. I am in the "discovery" phase currently.

The next question is: she can keep the house while on Medicaid (and they place a lien against it) and I believe I read that can continue for 13 months and then she has to list the home for sale at 90% of appraised (taxable) value. So when (if) it's sold does she go into another spend down and return to Medicaid when the funds are exhausted? Or does she now fail to meet eligibility and have to re-apply once the funds are exhausted?
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Re: Mom, Medicaid, and will she lose her house?

Post by arcticpineapplecorp. »

Remster wrote: Wed May 11, 2022 1:53 pm The next question is: she can keep the house while on Medicaid (and they place a lien against it) and I believe I read that can continue for 13 months and then she has to list the home for sale at 90% of appraised (taxable) value. So when (if) it's sold does she go into another spend down and return to Medicaid when the funds are exhausted? Or does she now fail to meet eligibility and have to re-apply once the funds are exhausted?
perhaps this is different State by State but in some states a person can keep a home if for no other reason then they may want to return to their home to die (rather than nursing home or hospital). They have to state they intend to return to what was their primary residence before entering skilled care. After they die, the state makes a claim against the estate. The house would have to be sold for fair market value (could be to heirs) and funds go to recoup what the State paid on her behalf through medicaid.

The problem becomes how does the client manage the house (taxes, insurance, utilities and maintenance) when they're paying all (or most) of their income to the nursing home and have very little assets to keep?

I think you should consult with an elder law attorney, especially because you're wanting to do a Miller Trust. You're gonna need a lawyer to establish that trust anyway.
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Re: Mom, Medicaid, and will she lose her house?

Post by bikechuck »

I went through this with my mother in Illinois and even though I researched it thoroughly and understood what was required I still hired an Eldercare Attorney and asked my mother and my sister (my mother's only other heir) to attend the meeting with the attorney as I wanted both of their buy in to how things should be managed. I consulted her primary care physician who advised me that she did need to be in a nursing home and that I or my sister could not care for her properly in our home(s).

We wound up selling my mother's house, moving her into a nursing home and spending down her assets until they reached the allowable $2,000. Most of her money when for drug costs as there was no medicare part D in those days.

The good news was that by being proactive and entering into a "spend down plan" with her county welfare department everything worked smoothly and as expected.

I wish the OP good luck in navigating this situation which is stressful and challenging for so many families.
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Re: Mom, Medicaid, and will she lose her house?

Post by wbarabas »

ekid wrote: Tue May 10, 2022 2:23 pm " got cut from Medicare because she wasn't improving fast enough "

(consternation)

How can that happen?
Happens all the time. I'm a PT in LTC. They expect miracles in 30 min a day.
It's cheaper to be medicaid vs medicare.
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Re: Mom, Medicaid, and will she lose her house?

Post by wbarabas »

Is there anyway she can go home with a sitter? Very expensive to be living in LTC. I work as a PT in the LTC setting. You would even qualify for home health and they will get you almost all of what you need, even a hospital bed.
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Re: Mom, Medicaid, and will she lose her house?

Post by JoeRetire »

Remster wrote: Wed May 11, 2022 12:10 pm Thanks everyone. I always get Medicare and Medicaid confused so sorry about the rant. Just very frustrated. Now to some of the questions:

Current assessed value is $279.000 so she is looking at 200,000 in capital gains if she sells to whomever. I am guessing if she goes on Medicaid she would have to spend down that money first and then they would renew coverage?
It's not clear what "renew" means in this context.

In order to qualify for Medicaid, she would have to spend down almost all of her assets. Medicaid is for people with virtually no assets. Likely she doesn't qualify yet.

It is what it is. As others have recommended, if you want a chance at some actionable advice, you'll need to talk with an elder care attorney. Unfortunately, there may still be nothing to be done here other than spend down the assets.

Sadly, mom most likely waited too long if her intent was to hide her assets from Medicaid. And of course without Long Term Care insurance, there aren't many other alternatives like paying for her own care (some call it "self-insuring") using her portfolio and home equity.

There's a lesson here for you as you get older.
I view the farm as a personal "loss" to me, possibly not a loss to her or others as it is an asset like any other asset. I would be losing access to the land and be left with nothing more than memories.
You will be left with the memory that mom got the care she needed once she could no longer afford to pay for it herself. Hopefully, that brings you some comfort.
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Re: Mom, Medicaid, and will she lose her house?

Post by ChrisC »

arcticpineapplecorp. wrote: Wed May 11, 2022 2:04 pm
Remster wrote: Wed May 11, 2022 1:53 pm The next question is: she can keep the house while on Medicaid (and they place a lien against it) and I believe I read that can continue for 13 months and then she has to list the home for sale at 90% of appraised (taxable) value. So when (if) it's sold does she go into another spend down and return to Medicaid when the funds are exhausted? Or does she now fail to meet eligibility and have to re-apply once the funds are exhausted?
perhaps this is different State by State but in some states a person can keep a home if for no other reason then they may want to return to their home to die (rather than nursing home or hospital). They have to state they intend to return to what was their primary residence before entering skilled care. After they die, the state makes a claim against the estate. The house would have to be sold for fair market value (could be to heirs) and funds go to recoup what the State paid on her behalf through medicaid.

The problem becomes how does the client manage the house (taxes, insurance, utilities and maintenance) when they're paying all (or most) of their income to the nursing home and have very little assets to keep?

I think you should consult with an elder law attorney, especially because you're wanting to do a Miller Trust. You're gonna need a lawyer to establish that trust anyway.
This is where a highly competent elder care lawyer can be worth his weight in gold. The consumer is generally a poor judge of professional legal talent, so the OP should seek out friends and others who travel, or know people who travel, in these professional circles to get a good lawyer in this area. (I say this as a retired lawyer, married to a retired lawyer, and the father of a practicing lawyer -- all of us in varied practices -- and generally even with our backgrounds it's hard for us to judge legal competency in niche practices!)

That 13 month rule for selling a primary residence seems no longer to be Ohio law; I did a simple google search of "medicaid in ohio sale of primary residence" which revealed that this rule was repealed in 2017. I'm not going to speculate about available measures the OP could or should take with her mother -- it's for wise, competent counsel to advise the OP, and not over the internet. Nonetheless, here's a general, brief overview of pertinent Medicaid rules published under the auspices of the Ohio Bar: https://www.ohiobar.org/member-tools-be ... -overview/. [Evidently, this publication is not available to the general public. Sorry about that but I was able to tap into this publication on my first try and now cannot.]
Last edited by ChrisC on Wed May 11, 2022 5:05 pm, edited 1 time in total.
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Re: Mom, Medicaid, and will she lose her house?

Post by delamer »

Remster wrote: Wed May 11, 2022 1:53 pm The lease income is $3200 a year which she uses to pay the property taxes and it is properly reported on her income taxes. If she had to reduce income to meet Medicaid eligibility she could put dad's $415 pension/annuity into the QIT which would then go to Medicaid to pay for her care.

She also has a $20,000 life insurance policy (tho it might be much lower now) that she would need to sell to reduce her assets to the $2000 threshold. I am Durable POA and am trying to get more information about it. I am also Healthcare POA and I have her living will. I am also executor of her estate.

I view the farm as a personal "loss" to me, possibly not a loss to her or others as it is an asset like any other asset. I would be losing access to the land and be left with nothing more than memories. We also planted 10 acres of black walnut trees 40 years ago to partially fund retirements - this was dad's idea.

I posted here because I lack knowledge in this area and have not done anything like this before. Dad died peacefully (we hope) two years after he retired while watching TV at home. I am in the "discovery" phase currently.

The next question is: she can keep the house while on Medicaid (and they place a lien against it) and I believe I read that can continue for 13 months and then she has to list the home for sale at 90% of appraised (taxable) value. So when (if) it's sold does she go into another spend down and return to Medicaid when the funds are exhausted? Or does she now fail to meet eligibility and have to re-apply once the funds are exhausted?
It’s fine to come here to get some general information.

But do what several posters have suggested and find an attorney who specializes in Medicaid planning in your state/area.

You may not be getting good advice from the facility staff. What best for them may not be best for your mother.
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Re: Mom, Medicaid, and will she lose her house?

Post by Agent 99 »

I know how stressful this situation is and it’s hard to think and act clearly. My advice is do not listen to any ideas the facility has suggested. The facility failed your mother by allowing an inappropriate standard of care (failure to improve) be used to discontinue her health insurance coverage. They are partially responsible for this predicament as well as the insurance company who knows better but is acting in a disreputable manner. You must contact an elder care attorney now. Trying to make sense of medicaid is sysiphean and any delay at this point is going to make the situation even more difficult.

You can find a certified elder care attorney here. https://nelf.org/search/custom.asp?id=5427
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Re: Mom, Medicaid, and will she lose her house?

Post by tj »

Remster wrote: Tue May 10, 2022 1:28 pm Hello,

Mom, 81 years old, resident of Ohio, had an "event," hospitalized, and ended up in a nursing facility, got cut from Medicare because she wasn't improving fast enough with PT/OT, is now self pay at $236 a day. She has about $2600 a month income from Social Security and a life annuity (was dad's pension). Medicaid income cut off is $2532 so the facility wanted her to start a Qualified Income Trust (QIT) or Miller Trust to reduce her income below the threshold. She owns her own home and owes about $24,000 on an equity line. I am supposed to inherit the house but it's not protected by a trust or anything if she ends up on Medicaid. The house is worth about $289,000 on last appraisal and I would like to keep it in the family (it is a 40 acre farm.) She has a $20,000 life insurance policy the facility wants her to cash out to reduce her assets below the $2000 threshold. No other tangible assets. Long term care insurance would be about $5000 a month at her age, it's best to start that between 60 and 65 to lock in a lower rate. Her plan was to die suddenly from some unknown medical condition to avoid all of this.

Dad passed away in 2005 and gave her a lifetime pension of $415 a month from his factory job. I do have a brother and sister in law who were given many "gifts" from mom over the years which is why I am the only one to inherit the home. She could have gifted me the home or sold it at a reduced rate years ago but kept saying how she wanted to sell it, reverse mortgage it, etc. I have thought about purchasing it but my average income is around $55k though right now I have a good contract job which should last another year that effectively triples my income. But me buying the house and footing the bill for her care lets my brother and his wife enjoy their "pre-inheritance" while I pay a mortgage.

She can still manage her own medications but it doesn't seem that she will be walking again. Before the event she was home with me and a home health aid for assistance. I don't live with her but I have been helping her 3-4 days a week for the past 6 years. Medicaid would require I actually live in the home for the past 2 years to have it not counted as an asset. I did not move in with her because she hid the fact that 6 figures of dad's retirement went towards my brother for over 10 years yet he only comes over to help for about 2 hours every other week. All her other relatives live in Canada and the last time they visited they went through the house and took valuables (stamps, jewelry) and told her "well you are dead already" when she asked why.

Oh and I understand that she should burn through her assets to pay for her medical care instead of being a taxpayer burden even though she has been paying into Medicaid for the past 60+ years. She even has a Medicaid deduction on her Social Security.

Please advise or if you need any further information let me know. Thanks!

What state makes you pay into Medicaid? Never heard of medicaid being withheld from social security.
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Re: Mom, Medicaid, and will she lose her house?

Post by Miriam2 »

Remster wrote: Wed May 11, 2022 1:53 pm I view the farm as a personal "loss" to me, possibly not a loss to her or others as it is an asset like any other asset. I would be losing access to the land and be left with nothing more than memories.
In the end, that is all any of us will have of most of our past.
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Re: Mom, Medicaid, and will she lose her house?

Post by aprilcpa »

GO SEE AN ATTORNEY FAMILIAR WITH ELDER LAW IN YOUR STATE TODAY.

I know you are concerned about all this, but do not act without seeing an attorney. There might be things you can do that I'm not going to go into here.

Your most concerning order of business is to take care of your mother. Right now, you don't need to worry about what happened in the past with your brother or who gets/got what.
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Re: Mom, Medicaid, and will she lose her house?

Post by nordsteve »

I'm no expert in this area, but I am married to an administrative law judge who deals exclusively with these questions.

When her grandparents needed help, she didn't do it herself - we hired an elder law attorney for advice. This is an area where spending a couple thousand on good legal advice will pay off.
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Re: Mom, Medicaid, and will she lose her house?

Post by Lee_WSP »

You can purchase the farm yourself for FMV if you really want to keep it. You can even have it seller financed so long as you actually make the payments.
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Re: Mom, Medicaid, and will she lose her house?

Post by arcticpineapplecorp. »

Lee_WSP wrote: Thu May 12, 2022 2:23 pm You can purchase the farm yourself for FMV if you really want to keep it. You can even have it seller financed so long as you actually make the payments.
But if seller financed that promissory note has to be DRA compliant.
Promissory Notes, Loans, and Mortgages
The Deficit Reduction Act of 2005 includes certain requirements for a transfer of assets in exchange for a promissory note, loan or a mortgage. If these specific requirements are not met, the exchange is treated as transfers of assets for less than FMV. An exchange of assets for a promissory note, loan, or a mortgage on or after February 8, 2006, must meet these conditions:

The repayment terms must be actuarially sound.

NOTE: Actuarially sound means the repayment terms are designed to pay off the entire amount of the promissory note, loan or mortgage within the actual or expected lifetime of the applicant, recipient or spouse of applicant who transferred the asset.

The repayment terms must provide for payments in equal amounts throughout the term, with no deferral and no balloon payment, and

The promissory note, loan or mortgage must not permit cancellation of the balance upon the lender’s death.


If the CAO determines that the promissory note, loan or mortgage does not meet all of the defined conditions, the CAO will apply a period of ineligibility for payment of LTC services.
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Re: Mom, Medicaid, and will she lose her house?

Post by Lee_WSP »

arcticpineapplecorp. wrote: Thu May 12, 2022 2:37 pm
Lee_WSP wrote: Thu May 12, 2022 2:23 pm You can purchase the farm yourself for FMV if you really want to keep it. You can even have it seller financed so long as you actually make the payments.
But if seller financed that promissory note has to be DRA compliant.
Correct. I’m just giving OP options to explore, not how to execute the deal.
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arcticpineapplecorp.
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Re: Mom, Medicaid, and will she lose her house?

Post by arcticpineapplecorp. »

Lee_WSP wrote: Thu May 12, 2022 2:54 pm
arcticpineapplecorp. wrote: Thu May 12, 2022 2:37 pm
Lee_WSP wrote: Thu May 12, 2022 2:23 pm You can purchase the farm yourself for FMV if you really want to keep it. You can even have it seller financed so long as you actually make the payments.
But if seller financed that promissory note has to be DRA compliant.
Correct. I’m just giving OP options to explore, not how to execute the deal.
I know, I just thought it was worth explaining that there are things to consider, hoops to jump through, etc so the OP understands the complexities of medicaid planning which is why he should consult with an elder law attorney (say it again).
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Re: Mom, Medicaid, and will she lose her house?

Post by water2357 »

Never heard that one had to cash in a life insurance policy to "reduce assets". It's possible that the state(Medicaid) may be legally allowed to recover some or all of the proceeds from the insurance policy at the time of death to cover what Medicaid spent on her care. But forcing someone to turn in a life insurance policy is odd, if premiums are still being paid on the policy possibly it could be converted to a paid up policy with a lower amount of insurance coverage. Surely it is more valuable to Medicaid as insurance than for its cash value. The facility may want the cash value so they get more payment up front. Again, you need an elder law lawyer.
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Re: Mom, Medicaid, and will she lose her house?

Post by nordsteve »

This article discusses the nuances of whole life and Medicaid eligibility. In general, a face or cash value above a certain level (varies by state) puts the owner above the asset limit.
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Re: Mom, Medicaid, and will she lose her house?

Post by likegarden »

I am 82, wife is 77, we have Long Term Care Insurance, though its getting more expensive every 2 years. So we will not have to go through all the trouble the poster has to go through. We also put our house in an Irrevocable Trust (for our son and grandson) more than 5 years ago, and that was also desirable per this post.
But I have an IRA, which will go to my wife upon my death, should go to our son after both of our deaths, and any Medicaid then might go after that after LTC. Let's hope for health in the future for everyone, also for all readers. In my family people got sick to go into a hospital for a few weeks before death.
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Re: Mom, Medicaid, and will she lose her house?

Post by Lee_WSP »

water2357 wrote: Thu May 12, 2022 11:56 pm Never heard that one had to cash in a life insurance policy to "reduce assets". It's possible that the state(Medicaid) may be legally allowed to recover some or all of the proceeds from the insurance policy at the time of death to cover what Medicaid spent on her care. But forcing someone to turn in a life insurance policy is odd, if premiums are still being paid on the policy possibly it could be converted to a paid up policy with a lower amount of insurance coverage. Surely it is more valuable to Medicaid as insurance than for its cash value. The facility may want the cash value so they get more payment up front. Again, you need an elder law lawyer.
They can sell it for FMV to their heirs. But if it has a cash value, it’s an asset.

You don’t have to dispose of it. You can do other things than redeem it.
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Re: Mom, Medicaid, and will she lose her house?

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Remster
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Re: Mom, Medicaid, and will she lose her house?

Post by Remster »

Thanks everyone for the replies, some of what I wrote was in haste and perhaps confusing. I believe if she gifted me the house, whether now or in the past, it would generate capital gains tax. I don't think she could financially do this as she has been using her equity line to pay regular expenses - I knew she had one but I didn't know that it was actively being used. I am meeting with an elder law attorney next week and am trying to collect all the information I can for that appointment. Her caregiver and myself have kept her out of a nursing home for at least 6 years. We looked into Assisted Living but the cost of keeping her home or AL was roughly the same and her goal was to die in the home. A week before she went into the hospital she was talking about selling and getting an apartment and since the bankers, lawyers, and real estate agents come to the house she could certainly have done so.

As to buying the house it would be difficult for me to pay the mortgage and update/repair the property at my current income level and I am not sure I would even qualify for a mortgage roughly 4x more than my annual income. Plus that goes back to her asset spend down. If she dies with a balance then by the will my brother would get half of the money unless she redoes the will to cut him out entirely. I know she put me on to inherit the house solely because of the large cash loans made in the past and I had a friend who had to sue his brother for his mother's house (even though he still lived there, but this was a non-Medicaid situation.) I would have helped improve the house before now but I had a feeling there was something wrong with her money between inheriting 1 million dollars and selling her business for 300,000.

I visit her almost every day and she can move and raise her arms and legs, pull herself around in bed, etc but getting up to use the bathroom is the only thing she cannot do. My brother and his wife are insistent she move to a nursing home and go on Medicaid as they have no interest in what's left of her assets. If the house needs to go to pay for her medical care or to reimburse Medicaid that is not an unexpected outcome. My friend suggested donating the property to a land conservancy as it is bound on two sides by county owned parks.

I heard I can pre-plan spending her life insurance on her funeral expenses so am meeting with her funeral home of choice sometime soon to see about that.

Thanks again everyone.
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Re: Mom, Medicaid, and will she lose her house?

Post by aprilcpa »

OP - will you be able to maintain the property if you get it free? How much are the property taxes, insurance, and general maintenance costs?

Please don't do ANYTHING until you meet with the attorney, including cashing in her life insurance and going to a funeral home. You need to be sure of what you can do before going on what others say.
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Re: Mom, Medicaid, and will she lose her house?

Post by Agent 99 »

To reiterate what others have said - Medicaid has very strict criteria on how money was spent during the 5 year look back period. Her benefit could be nothing if money is spent on things contrary to the Medicaid laws. It is imperative that a lawyer is consulted immediately. And please do not listen to the guidance of the care facility. An eldercare lawyer is urgently needed.
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Re: Mom, Medicaid, and will she lose her house?

Post by ChrisC »

Remster wrote: Mon May 16, 2022 11:55 am

I heard I can pre-plan spending her life insurance on her funeral expenses so am meeting with her funeral home of choice sometime soon to see about that.

Thanks again everyone.
I think what you heard is correct but double check with your lawyer about this as well. I'd aim very high here for funeral expenses coverage. In our case, we bought a modest prepaid funeral contract (regulated by the State of New York) in 2007. When used in 2018 after a long goodbye, funeral expenses had more than doubled from the modest contract we purchased. And you might not be able to lock in certain funeral expenses, like caskets or burial plots (we already had one). Be sure it's a contract that conforms to whatever safeguards state regulatory bodies have for these arrangements.

We went to our funeral home of choice, the one we used for my Dad and the funeral director was a local fixture in our neighborhood in Brooklyn NY. This funeral home later went out of business (the director/owner called it quits and the funeral home's location was a prized place for real estate developers who paid him an extraordinary premium to buy the real estate location.) But my sister, a realtor in the area, kept in touch with him (though he moved far from the area) and he assured us he would take care of things when we needed to use the contract. He also told us that his prepaid burial contracts were assumed by another local funeral home, which later took care of all our funeral needs.

I'd also check to make sure that some, if not all, the legal expenses your mom is now incurring with the elder care lawyer (including for POAs, health care directives, etc,) are also not subject to lookback/transfers. You shouldn't be personally out-of-pocket for these expenses as they are done primarily for the benefit of her and her family.
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