Tag Archives: MEDICAID

Can I become my aunt’s power of attorney?

Q. Is it possible that i can become my aunt power of attorney? Her mental state of mind is going downhill and she has no children. The friend that she was staying with just recently died. He was the one that took care of her. Helped her pay her bills and keep up with her hygiene. Right now she is staying with me but i don’t feel as though I am capable of taking care of her myself.

A. Yes, I assume you can become the agent on a Power of Attorney for your aunt, unless there is some reason you cannot. A General Durable Power of Attorney (GDPOA) is probably recommended but you really need to sit down with an attorney and discuss all of the facts. She needs to be mentally competent to sign a GPOA. Don’t wait longer to do so, as her condition may deteriorate and render her incompetent to sign. You may also need to contact the Department of Aging to see what help you can get. An attorney can also advise you about applying for Medicaid if she has insufficient money to pay for her care.

Is a prepaid funeral a proper way to do Medicaid “spend down”?

Q. My father is in a nursing home applying for Medicaid. My mother wants to pay for burial costs now. Would this be a bad thing, applying for Medicaid? My father is already in nursing home and afraid Medicaid will take all of his money.

A: Any “spend down” should be done as part of the spending down provisions through a Medicaid eligibility application. Certain prepaid funeral arrangements are Medicaid exempt, it would be a really, really bad idea to make prepaid funeral arrangements with the idea of protecting assets when long term care is needed UNLESS the arrangement is part of Medicaid planning under auspices of an elder law attorney. Why? Because prepaid funeral arrangements are exempt only if they satisfy state requirements, an arrangement that doesn’t meet state requirements can cost thousands of dollars by delaying eligibility, and a prepaid funeral may or may not be the most cost effective technique in different situations. It is well worth consulting a local elder law attorney.

Should my mother put my sister and I on the deed to her home?

Q: My mother thinks that her name should be taken off the deed to her home and my sister and I should be put on the deed to avoid complications when my mother ultimately goes into a nursing home or dies. First, we heard this is an expensive process. Is that true? Secondly, is it advisable?

A: To answer your first question about expense, this is not an expensive process in your case. Assuming your mother is the only name on the deed or she is on the deed with your deceased father, this transaction should be exempt from PA real estate transfer tax as it is a “family transfer”. If it were not exempt, such as the case with most real estate sales, or transfers to non-family members, the transfer tax is at least 2% of the sales price or market value of the realty. For a $100,000.00 home, this could be a $2,000.00 transfer tax. In your case, the only costs to you would be the attorney fee to draft the deed (usually $100.00 to $300.00) and the filing fee paid to the Department of Real Estate, which is $150.00 in Allegheny County. Whether this transfer is advisable in your situation, is a much bigger question. There are advantages and disadvantages to both parties of the transfer, you and your sister, as well as your mother. You should consult with an attorney before changing names on a deed to make sure you are well aware of all the issues including real estate tax discounts, inheritance tax, capital gains and PA Medicaid eligibility and liens. In summary, this transfer could exclude her from Medicaid eligibility if she needs to apply in the next five years, by transferring to you she may lose her senior citizen and Homestead Act real estate tax exclusions and discounts. You and your sister may face a capital gains tax when you sell this house. Such transfer will avoid inheritance tax if mom lives one year past the date of transfer, however, is it really worth it to avoid a tax rate of only 4.5%? Should mom transfer to mom and you two siblings as joint tenants instead? Those are just a few things you will need to discuss with an attorney before doing this.