Q: HOW DOES THIS WORK. I HAVE A PARENT WHO IS IN A FACILITY. WE WANT TO APPY FOR MEDICAID. WE WANT TO GIFT MONEY TO 7 GRANDCHILDREN. WE WANT TO APPLY FOR MEDICAID BUT IN ORDER TO DO SO WE HAVE TO SPEND HIS MONEY DOWN TO BELOW A CERTAIN NUMBER. THE PARENT WANTS TO GIFT SOME TO HIS GRANDCHILDREN. HOW DOES THAT LOOK TO WHEN MEDICAID IS LOOKING BACK 5 YEARS INTO HIS ACCOUNTS? WHEN ALL BILLS ARE PAID DOWN AND FUNERAL IS PRE-ARRANGED. IS THAT POSSIBLE? (NEW KENSINGTON, PA)
A: the short answer is do not do this yourself. It sounds like it would be a flagrant violation of medicaid regulations and could cause your parent to be ineligible for medicaid and spend their remaining days in a run-down, flea-ridden, warehouse for the elderly. there are certain ways to spend-down with the procurement of medicaid exempt necessities and perhaps to even shelter some of this money. however, only do this through an attorney versed in medicaid regulations
Q: My daughter is beneficiary of a life insurance policy. The owner just went to a nursing home on hospice. The Executor wants to cash in the policy for the cash value for Medicaid. The owner of the policy is of sound mind. What are our rights? (Pittsburgh, PA)
A: The owner of the policy can do as he or she wishes. It is not the decision of the Executor. The Executor is appointed in the will and only has legal authority after the owner dies. If this person is Agent on a valid Power of Attorney signed by the owner, he or she may have authority to do this if the language of the POA allows it. However, if the owner is competent to make this decision, the Agent must abide by the owner’s wishes and cannot act to the contrary. Perhaps the Executor thinks the owner needs to liquidate this policy in order to spend down for Medicaid? Under section 258.3 of the PA Code, life insurance policy proceeds payable to a living beneficiary are not subject to the claim of the PA Department of Human Services, who manages the Medicaid program in PA. My thought is that if this “Executor” person is trying to do Medicaid planning without the assistance of a lawyer, he or she is taking a risk. Advise this person to seek legal help from an attorney versed in Medicaid regulation.
Q: Is my mother responsible for a credit card bill when she will be put into a nursing home in a couple of days? Medicaid will be taking her small SS and retirement to pay for the home. She will have absolutely no money to pay for the credit card balance. She has absolutely no assets and the card is in her name only. Can she just inform the company and let the balance go?
A: Basically. Yes, if what you are saying is correct her money will be spent down to the level permitted in her personal care account at the nursing home, under Medicaid regulations. They can sue her but won’t collect because she is indigent and her personal care account is a protected asset. They can bring a claim against her estate when she dies but their claim would be behind, Medicaid, and others. It is likely that there will be no estate when she dies. If for some reason there is money remaining when she dies, Medicaid and other priority claims take their share, for example, for taxes, administrator fees, lawyer’s fees. I would inform the credit card company of the situation and send them any paperwork if they ask. If they keep pestering you, change your phone number. Sometimes, these big credit card companies just don’t get it and spend thousands of dollars pursuing claims against people who are penniless or who have even been dead for years.
Q: My mother has Alzheimer’s and needs help caring for herself. She is mobile but needs help with meal prep, bathing and going to the bathroom. She did fall a couple times earlier this year and did get lost in her apartment complex. Doctors said she should not be alone. My brother has been staying with her since April. Can he be paid from her assets (20 thousand?) in order to get her closer to the Medicaid limit of $2000?
A: Any payment of caretaker funds must be done in accordance with Medicaid guidelines for spend down limits. An elder law attorney will know how to accomplish this for you. If you do it on your own, you may risk a penalty and possible Medicaid ineligibility.
Q: If I have a whole life insurance policy. Do I have to cash it in to qualify for MA or do they put a lien on proceeds at my death? I have $300,000 whole life with $25,000 cash value. Do I have to cash in to access the cash value or would they put a lien on the proceeds at my death, in order to qualify for medical assistance to pay for nursing home care?
A: Your question can only be answered with an experienced elder law attorney reviewing all of the facts. Generally, if you don’t want to lose the insurance policy, many insurance policies allow you to “borrow down” the cash value of the policy. Then you can spend those funds in an approved way that will allow you to qualify for benefits. This way, you can retain the benefit of the insurance coverage for your beneficiaries when you pass. You need an experienced elder law attorney well versed in Medicaid regulations to look at your situation and you want to have the insurance company carefully explain your options.
Q: When should I file my parent’s Medicaid application for long term care? He should qualify as medically necessary, but only after we spend his 40k savings on private care. Should I file now or after he spends the money?
A: It is highly advisable not to do this on your own. If there are $40,000.00 in assets to spend down, you need to do this with the advice of an experienced elder law attorney. There are ways to shelter some of these assets and it will be well worth the legal fee as it will likely save a portion of your father’s money which will otherwise go to Medicaid.
Q: How much can an independent senior (84 years old) gift money without getting penalized if admitted to a nursing home shortly after? How much money can be gifted to children each without penalization? How much money may be gifted to grandchildren?
A: The Federal Gift Tax Exclusion allows you to give $14,000 in cash or other assets each year to each of as many individuals as you want without dipping into the basic exclusion. However, if grandmother may need to apply for Medicaid funding in order to afford her nursing care in the next five years, these gifts may not be advisable. Medicaid eligibility rules have a five year look back on all such gifts or transfers made without consideration. Therefore, any gift made in the previous five (5) years of the Medicaid application and eligibility, can result in her being ineligible, or her being excluded from funding to the extent of the dollar amount of monetary gifts made without consideration. If you believe that Medicaid may be in her future, it would be wise to have grandmother consult with a lawyer versed in Medicaid law, now. There are ways of excluding some of her estate from a Medicaid claim. There are exclusions and exceptions, trusts can be created and there are allowable purchases that can be made in the Medicaid spend down process.
Q. I have been denied Medicaid because I have too much money in my bank account. What can I do with the excess without spending it? The state has asked for receipts or detailed list of expenditures.
A: There are various ways to spend down excess Medicaid resources. Sometimes gifts are useful but other they can also disqualify you. Buying things and paying debts often are good spend down techniques. However, you really need to consult with an elder law attorney before you set out to do this.
Q. When my elderly mother enters a nursing home, can I keep her house? I am her 24/7 caregiver and have no home otherwise. I have household expenses, upkeep and taxes. The deed is in her name. I don’t know what other details are required here. I have lived here and been her caregiver for 12 years.
A. Make sure she has a Last Will and Testament in place in which the house is left to you, assuming that is her wish. If there are no other children and she has no surviving spouse, you can inherit the house even without a will. However, it is best for her to have one. If she runs out of cash to afford nursing home care, you may have to apply for Medicaid/DPW for her. They may claim an interest in the home but as a surviving child/caretaker living in the home, they will not throw you out of it. When she dies, DPW can go after the deceased person’s property under the Medicaid Recovery Act. However, since you were her caretaker for 2 years prior to DPW eligibility, you can file an undue hardship petition and probably keep the house. I would see a lawyer versed in Medicaid law to review your mother’s specific situation.
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.