Mom, Medicaid, and will she lose her house?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
TexasPE
Posts: 690
Joined: Sat Feb 17, 2018 7:41 pm
Location: Southeast Texas

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

Post by TexasPE »

Northern Flicker wrote: Tue May 10, 2022 5:46 pm
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.
+1

https://www.naela.org/

Your comments seem to confuse MediCARE (one set of rules for all 50 states) and MediCAID (state-run, each state is different). Make sure the attorney is qualified and specializes in Elder Care IN YOUR MOTHER'S STATE and is not a run-of-the-mill family lawyer (who does wills, etc.) The elder care attorney will know what steps you can take.
At 20: I cared what everyone thought about me | At 40: I didn't give a damn what anyone thought of me | Now that I'm 60: I realize that no one was really thinking about me at all | Winston Churchill (?)
mkc
Moderator
Posts: 3291
Joined: Wed Apr 17, 2013 2:59 pm

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

Post by mkc »

TexasPE wrote: Mon May 16, 2022 4:37 pm
Northern Flicker wrote: Tue May 10, 2022 5:46 pm
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.
+1

https://www.naela.org/

Your comments seem to confuse MediCARE (one set of rules for all 50 states) and MediCAID (state-run, each state is different). Make sure the attorney is qualified and specializes in Elder Care IN YOUR MOTHER'S STATE and is not a run-of-the-mill family lawyer (who does wills, etc.) The elder care attorney will know what steps you can take.
+2 on getting a specialized Elder Care attorney and speaking with them BEFORE the funeral home. An Elder Care attorney will advise you on how to set up a prepaid funeral plan properly, especially in light of future Medicaid application. The Elder Care attorney we used for a parent's situation made the entire process run so much more smoothly than if we were trying to do any of this ourselves.
water2357
Posts: 654
Joined: Sat Sep 12, 2020 9:24 am

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

Post by water2357 »

Remster wrote: Mon May 16, 2022 11:55 am 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.
Donating the property is GIVING A GIFT, you can't do that within 5 years of applying for Medicaid or you will disqualify your mother from Medicaid for the number of years of LTC that could have been paid for by selling the property.

At least in PA, the only way to set aside funeral expenses within the 5 years before applying for Medicaid is by setting up an IRREVOCABLE TRUST that will be used solely for her funeral expenses.

I don't know where you are getting various information on Medicaid, but please get an elder lawyer who specializes in Medicaid regulations in the State your mother lives in. And talk to that lawyer before you talk to anyone else or do anything else.
ChrisC
Posts: 1475
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

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

Post by ChrisC »

water2357 wrote: Tue May 17, 2022 12:15 am
Remster wrote: Mon May 16, 2022 11:55 am 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.
Donating the property is GIVING A GIFT, you can't do that within 5 years of applying for Medicaid or you will disqualify your mother from Medicaid for the number of years of LTC that could have been paid for by selling the property.

At least in PA, the only way to set aside funeral expenses within the 5 years before applying for Medicaid is by setting up an IRREVOCABLE TRUST that will be used solely for her funeral expenses.

I don't know where you are getting various information on Medicaid, but please get an elder lawyer who specializes in Medicaid regulations in the State your mother lives in. And talk to that lawyer before you talk to anyone else or do anything else.
Prepaid funeral expense contracts, when non-refundable, are generally in the form of an irrevocable trust; most, if not all, funeral homes have Medicaid-compliant non-refundable contracts to do this. So, OP is on the right track; she does not need to talk to an elder care lawyer before she seeks out funeral homes that have prepaid Medicaid compliant contracts but she should bring any contract to the lawyer before she signs it.

As to gifting property to a land conservancy, this is not a simple issue to address here with absolute advice that such a gift triggers look back and would disqualify someone from Medicaid. It’s possible to donate conservation easements to property that would not be considered a transfer under Medicaid rules.

I’m not going to post further here because I don’t want to add to any confusion the OP might have in digesting advice here or from others in real time. She should get feedback and advice from her competent elder care lawyer.
water2357
Posts: 654
Joined: Sat Sep 12, 2020 9:24 am

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

Post by water2357 »

In PA there are additional expenses that can be covered outside of an irrevocable funeral trust (whether with a bank or the funeral director). The irrevocable trust itself must be within the limits set by the State of PA for reasonable funeral director/home expenses. If the State(Medicaid) deems that too much money has been set aside for these expenses, Medicaid can claim the excess.

For the additional expenses that are covered outside of the trust, the type of expense is listed but not the amount although I'd still be careful about going too far afield on cost. These additional expenses are usually those through e.g. a cemetery, which can include such items as a casket.

But as said by others, Medicaid rules can vary by State, thus the need for a lawyer with State specific knowledge. The trust through a bank is not dependent on a particular funeral director. The funds are paid to whomever is the funeral director at the time of death.

These additional nuances to dealing with setting aside monies for final expenses can be explained by your mother's elder care lawyer to help you and she decide which direction to take to provide for those final expenses.
User avatar
Miriam2
Posts: 4387
Joined: Fri Nov 14, 2014 10:51 am

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

Post by Miriam2 »

nordsteve wrote: Fri May 13, 2022 4:00 pm 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.
Thanks for the link to this article on Medicaid from the American Council on Aging :happy
User avatar
Topic Author
Remster
Posts: 72
Joined: Sat Mar 08, 2008 7:57 pm

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

Post by Remster »

Just an update on some things. My brother tried to get me removed as POA but mom told him that she wanted me to stay in the role. I looked at guardianship but the cost would be charged against her estate, which is the house I am trying to save. I am looking at moving mom from the nursing home to assisted living as she wants more opportunities for activities. Her lawyer had me explore some options.

1. Aid and Attendance: this would help pay for assisted living costs, unfortunately Dad missed all wars during his time of service. She does not qualify for this benefit.

2. Assisted living is around $5200 a month and Mom makes $2400 a month ($2600 with pasture rent). The difference has to be paid either by her assets or her family. My brother says he won't help even though he got six figures of gifts. He says "I don't owe her anything. It was all gifts." We are being delayed by her life insurance - it is Canada Life and they are being difficult to work with. Half the money will go to her burial trust and the other half towards debt. She is currently at a nursing home that is costing $7130 a month out of pocket. Her lawyer had some suggestions as how to manage her assets :

A. Caregiver child exception: Mom kept logs of my visits along with what I did during each visit. Her doctor also wrote out a statement that my care plus other caregivers kept mom out of a nursing home. Her lawyer feels we can make a good faith effort for the exception. I would get the house, plus the $30,000 equity line, and the house would be protected from Medicaid Estate Recovery.

B. Sell her house to a third party purchaser and do a partial gift to me and use the rest to create a Medicaid compliant annuity. The annuity would cover the cost difference between her income and care cost until she is past the gift penalty period. She would then be eligible for Medicaid. I would get around $172,000 with this option.

C. I purchase the house and do the partial gift and Medicaid compliant annuity. If my math is right the annuity would be around 64k and the gift back to me would be around $172,000. The house would be protected from Medicaid estate recovery. If I put all the money back against the house I would owe around $90,000. Monthly costs would be around $1200. Then sell my house for 40-60k to lower the mortgage.

D. I sell my house (worth 40k-60k) and use the funds to cover the difference in her care costs while at Assisted Living. Would last 14 to 20 months depending on my final sale price. This would delay applying for Medicaid. Would still have to cover the costs of maintaining her house - around $800 a month, half of which is the equity line. Not sure on the benefit here other than I inherit the house without worrying about Medicaid estate recovery if she passes before Medicaid starts. I see her living at least another 9 years however.

The lawyer is recommending B or C as it would immediately protect her assets from Medicaid estate recovery. The caregiver child exception is a wild card but if successful would still need to pay her equity line and the difference in her care costs at assisted living for 24 months.

One problem is I have half an acre at my house and I have about 2 acres of stuff at Mom's house since I have been helping her for years. I had been looking for a property with more land and an outbuilding before Mom had her event.

Thanks for reading.
Tiered retirement plan: 1. Saving and investing; 2. Lottery tickets; 3. "Do you want fries with that?"
ChrisC
Posts: 1475
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

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

Post by ChrisC »

Remster wrote: Thu Jul 21, 2022 10:56 pm Just an update on some things. My brother tried to get me removed as POA but mom told him that she wanted me to stay in the role. I looked at guardianship but the cost would be charged against her estate, which is the house I am trying to save. I am looking at moving mom from the nursing home to assisted living as she wants more opportunities for activities. Her lawyer had me explore some options.

1. Aid and Attendance: this would help pay for assisted living costs, unfortunately Dad missed all wars during his time of service. She does not qualify for this benefit.

2. Assisted living is around $5200 a month and Mom makes $2400 a month ($2600 with pasture rent). The difference has to be paid either by her assets or her family. My brother says he won't help even though he got six figures of gifts. He says "I don't owe her anything. It was all gifts." We are being delayed by her life insurance - it is Canada Life and they are being difficult to work with. Half the money will go to her burial trust and the other half towards debt. She is currently at a nursing home that is costing $7130 a month out of pocket. Her lawyer had some suggestions as how to manage her assets :

A. Caregiver child exception: Mom kept logs of my visits along with what I did during each visit. Her doctor also wrote out a statement that my care plus other caregivers kept mom out of a nursing home. Her lawyer feels we can make a good faith effort for the exception. I would get the house, plus the $30,000 equity line, and the house would be protected from Medicaid Estate Recovery.

B. Sell her house to a third party purchaser and do a partial gift to me and use the rest to create a Medicaid compliant annuity. The annuity would cover the cost difference between her income and care cost until she is past the gift penalty period. She would then be eligible for Medicaid. I would get around $172,000 with this option.

C. I purchase the house and do the partial gift and Medicaid compliant annuity. If my math is right the annuity would be around 64k and the gift back to me would be around $172,000. The house would be protected from Medicaid estate recovery. If I put all the money back against the house I would owe around $90,000. Monthly costs would be around $1200. Then sell my house for 40-60k to lower the mortgage.

D. I sell my house (worth 40k-60k) and use the funds to cover the difference in her care costs while at Assisted Living. Would last 14 to 20 months depending on my final sale price. This would delay applying for Medicaid. Would still have to cover the costs of maintaining her house - around $800 a month, half of which is the equity line. Not sure on the benefit here other than I inherit the house without worrying about Medicaid estate recovery if she passes before Medicaid starts. I see her living at least another 9 years however.

The lawyer is recommending B or C as it would immediately protect her assets from Medicaid estate recovery. The caregiver child exception is a wild card but if successful would still need to pay her equity line and the difference in her care costs at assisted living for 24 months.

One problem is I have half an acre at my house and I have about 2 acres of stuff at Mom's house since I have been helping her for years. I had been looking for a property with more land and an outbuilding before Mom had her event.

Thanks for reading.
Thanks for the update as it might be helpful to others navigating a similar path. Regarding the VA Aid & Attendance qualification for a surviving spouse, the benefit attaches to veterans who had 90 days of active duty (and at least 1 day of the duty occurred) during designated wars such as WWII, Korean Conflict, Vietnam, Desert Storm/Persian Gulf. (And I assume, Iraq and Afghanistan operations will be later designated.)

You don’t you have to be in actual combat or deployed in a combat zone during these war time periods only that you served on active duty during that period. We have a WWII veteran (100 years old this Oct.) in our family who was in combat in the European theater who qualifies for the benefit. And my MIL would have qualified for the spousal Aid & Attendance benefit even though her husband did all his WWII service stateside.

My BIL missed out on this benefit because his service was outside of the designated periods (as he served from 1979 to 1984) but I assume most veterans now between 70 and 80 years old would likely have service falling into the Vietnam era. I guess for veterans who are now 80ish their service may have been post Korean Conflict and pre-Vietnam War. We have a friend who falls into this category, served and stationed in Germany at Checkpoint Charlie and was there when the Berlin Wall was built overnight in 1961.


Did your Dad just miss the eligibility periods?
User avatar
Topic Author
Remster
Posts: 72
Joined: Sat Mar 08, 2008 7:57 pm

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

Post by Remster »

ChrisC,

Dad served from March 7th, 1957 to February 28th 1961. February 28th, 1961 was the first day of the ground war in the Republic of Vietnam and he is a Navy Veteran. So according to Veteran Services he does not (nor does his spouse) qualify for Aid and Attendance.
Tiered retirement plan: 1. Saving and investing; 2. Lottery tickets; 3. "Do you want fries with that?"
User avatar
Topic Author
Remster
Posts: 72
Joined: Sat Mar 08, 2008 7:57 pm

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

Post by Remster »

Mom passed away recently which was a surprise as I thought she would live a few more years at least. I think her elder law attorney figured she would pass soon as she kept delaying me on filing the Medicaid application. She said most residents of Assisted Livings (AL) and/or Skilled Nursing Facilities (SNF) pass away within two years of moving in. The AL required self pay (out of pocket) for two years (2 years ago it was 18 months) before accepting Medicaid. One of my requests when I was interviewing facilities was the ability of starting Medicaid before the two years as it is up to the owner of the facility as to when they accept Medicaid reimbursement. Medicaid reimbursement is much lower than self pay so it is not in the facilitie's best financial interest to accept it earlier. The Assistant Director told me they want the two years self pay (spend down) to get as much money as possible before the resident goes on Medicaid.

Mom and I asked my brother to come to the house and see what he wants, so far he hasn't done that. I have spent $40k out of pocket on her care and covering her other expenses against his $6500, I am not sure if that would come out of the estate or just cost of caring for others. The attorney is swamped and I have an appointment in May to meet with her about probate. My brother thinks I am greedy since I am the sole inheritor of her house which is pretty much her only asset. His wife hinted to me to sell and share with "my only sibling."
Tiered retirement plan: 1. Saving and investing; 2. Lottery tickets; 3. "Do you want fries with that?"
Longdog
Posts: 2180
Joined: Sun Feb 09, 2014 5:56 pm
Location: Philadelphia

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

Post by Longdog »

Remster wrote: Wed Apr 19, 2023 7:03 pm Mom passed away recently which was a surprise as I thought she would live a few more years at least.
I'm so sorry for your loss.
Steve
sailaway
Posts: 8215
Joined: Fri May 12, 2017 1:11 pm

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

Post by sailaway »

Remster wrote: Wed Apr 19, 2023 7:03 pm Mom passed away recently which was a surprise as I thought she would live a few more years at least. I think her elder law attorney figured she would pass soon as she kept delaying me on filing the Medicaid application. She said most residents of Assisted Livings (AL) and/or Skilled Nursing Facilities (SNF) pass away within two years of moving in. The AL required self pay (out of pocket) for two years (2 years ago it was 18 months) before accepting Medicaid. One of my requests when I was interviewing facilities was the ability of starting Medicaid before the two years as it is up to the owner of the facility as to when they accept Medicaid reimbursement. Medicaid reimbursement is much lower than self pay so it is not in the facilitie's best financial interest to accept it earlier. The Assistant Director told me they want the two years self pay (spend down) to get as much money as possible before the resident goes on Medicaid.

Mom and I asked my brother to come to the house and see what he wants, so far he hasn't done that. I have spent $40k out of pocket on her care and covering her other expenses against his $6500, I am not sure if that would come out of the estate or just cost of caring for others. The attorney is swamped and I have an appointment in May to meet with her about probate. My brother thinks I am greedy since I am the sole inheritor of her house which is pretty much her only asset. His wife hinted to me to sell and share with "my only sibling."

Sorry for your loss.

The estate can really only reimburse formal expenses, which it doesn't sound like the $40k was ever formalized. On the other hand, you are under no obligation to split your inheritance in any way not designated in the will or by TOD designations. I hope your family can move on amicably.
User avatar
Topic Author
Remster
Posts: 72
Joined: Sat Mar 08, 2008 7:57 pm

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

Post by Remster »

Thank you for your condolences.

As POA and preparing to file for Medicaid I tracked every penny I spent of mom's money and my money that was spent on her care and managing her estate. I even tracked the money my brother spent. I sent copies of all expenses to her attorney and my brother via e-mail to be fully transparent. I used checks and detailed on each check what it was for, what invoice was being paid, etc. I have spreadsheets of everything and receipts. I also tracked on a calendar when I was there, what I did, what my brother did, etc.

I am not sure how much more formal it could have been unless I wrote myself a contract as POA to bill those expenses against her estate. Given that the house is 99% of her estate and she changed her will to leave me the house and property I figured I would be making a claim against what I was already going to inherit.

The other one percent is a modest stamp collection that could be worth hundreds or thousands but I am having a hard time getting it appraised. My uncle wanted to grab all of them and take it to his friend's pawn shop in Canada. Him and my brother were pushing mom to make that happen but I said I would only allow it if I was there and the money went towards her care. My aunt took some last year when she visited with claims she would find out the value and get mom the money but so far nothing. There was also the Medicaid consideration of fair market value so no one would get in trouble when we applied and have to pay the value back to her estate.
Tiered retirement plan: 1. Saving and investing; 2. Lottery tickets; 3. "Do you want fries with that?"
sailaway
Posts: 8215
Joined: Fri May 12, 2017 1:11 pm

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

Post by sailaway »

Remster wrote: Thu Apr 20, 2023 12:20 pm

I am not sure how much more formal it could have been unless I wrote myself a contract as POA to bill those expenses against her estate.
That, notarized, is what I would expect if someone were making claims against an estate, but IANAL.
HomeStretch
Posts: 11415
Joined: Thu Dec 27, 2018 2:06 pm

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

Post by HomeStretch »

Condolences on your loss. Your mom was lucky to have your support.

You will get best advice and probate assistance, if needed, from your attorney. If allowed, the Estate could reimburse you and your brother for substantiated care costs paid on your mother’s behalf. As far as inheriting the house, it sounds like that is your mom’s gift to you similar to the gifts she had already given to your brother. Contrary to your brother/brother’s wife’s claims, there is nothing greedy about accepting repayment and honoring your mom’s wishes that you inherit the house.

I am currently administering my parent’s Estate. Per our attorney, the Estate should reimburse me for the $20k in care costs that I paid on my parent’s behalf before they applied for Medicaid. There is no formal loan document (my parent was incompetent). I have the skilled nursing facility invoice and the check I paid with.
Post Reply