Can I spend down mom's money to purchase living room furniture so that she is comfortable?

Jeanne - geez thanks for reminding me. My brain has just been so focused on NH aspects of all this. Yes, absolutely right and so needed for many. My bad.

Hilkay - OK I have some experience in dealing with a NH related Medicaid transfer penalty. But no idea if it is the same for Medicaid for at-home services in how they require documentation.

For NH this is how it worked for my mom who is in a NH (just slightly younger than your mom) and on Medicaid. The NH gave me a 1 page list of items required for her Medicaid for NH application (let me know if you want me to do a post on that), my MIL - also in TX - got a 2 page requirement. So there is no set list - nothing but FUN there. In my mom's list of required stuff was the last 6 months of all bank statements and also a notarized letter required from every bank regarding any and all bank accounts closed out in the last 3 years. For us, it was OK as I had years ago consolidated her accounts to a single community based bank and as my mom's CD's expired then went into her main drawing account. If an account had had a withdrawal of over 5K that was not deposited into her account, I would have had to provide documentation as to what for - but we didn't so skated on that one. Now my mom had been in IL on private pay before NH so where her $ was going was pretty obvious also she still owed her home so again where her money was going was obvious.So there was an easy pattern to follow both for the NH in accepting her "Medicaid Pending" and later for the state Medicaid caseworker. All in all, she got a 3 year 6 month review of bank stuff.

Transfer penalty from gifting seems to be triggered either by the state's dovetailing of property records during the application review process or by withdrawals of significance in looking at their bank statements. Each state seems to do this differently, as I said nothing but FUN. If say in March, 2010, they had 85K in their account and today, March, 2013 have $ 2K and live with family then it is going to pique the caseworkers interest and you will have to provide documentation that makes sense that all that $ was spent on her needs or her care. It doesn't have to be logical stuff either - it can be a face-lift or a trip on the QE2 just a well as expensive dental work or new shoes - it just has to be their $ on or for them. Otherwise they will be declined for Medicaid until you can provide documentation that they can put in their file.

For my mom, her car was a transfer penalty question. and was just inside the 5 year review period. It came up about month 4 of her being in the NH. How the transfer penalty works is that the rate is based on whatever your state has set as it's Medicaid daily reinbursement rate for the NH. For Texas, it's about $ 143.00 per day transfer penalty as the state pays a NH $ 143.00 a day for room & board under Medicaid. So in TX, a car valued at 20K is about a 140 day transfer penalty in which although the elder is qualified for Medicaid they are ineligible for Medicaid payment. Yes, you kinda have to read that last sentence twice as it's tricky. Understand? Now each state has their own formula in how the transfer penalty is done and will make the IRS rules look simple. Now a transfer penalty can be appealed, that's what I did, and the appeal was set like 4 months down the road. That is a super long time to get your paperwork together if need be, BUT the critical part was that the appeal filing window is short (well at least it was for us for TX) and as long as there is an appeal in the system they are on Medicaid. For us this last part was critical as the NH would have loved to bill us for private pay but they couldn't as long as there was an appeal in the works. I was able to deal the the transfer penalty in about 2 weeks as it was the wrong Kelly BLue book value as the year & model were wrong and then a letter from her mechanic as to the condition of the vehicle along with several cancelled checks on work they had done to validate that the value was way below what they thought. Car was gifted to worthless nephew too so he was of no help. Faxed it all over to caseworker and she was approved the next day. Champagne all around.

You are not alone, I am of the firm belief that if they live long enough that they will eventually run out of $$. My mom has outlived all siblings, husbands, and many of nieces and nephews. She is the Energizer Bunny of Dementia as she has Lewy Body Dementia and shuffles when she "walks" scooting her walker. Too funny.
But I digress, the gift to the granddaughter will be hard to get around. But the 13K to you, well I'd look into figuring out a way to justify it for room & board costs. Good luck and keep a sense of humor.

Here are more details. My mother has about $45,000 left in the bank. We pay for private duty care as she is non-ambulatory, and hearing/visually impaired. We do not have a 5-year look-back. In 2012, she gifted me $13,000 and her grand-daughter, $5,000 at graduation. She has less than a year's worth of savings before being Medicaid eligible. I have since learned there will be penalty on the monetary gifts because they fall within the 5 year look-back. Can someone tell me what these penalties may be? As previously stated, she does not own life insurance, property, stocks or mutual funds. She is in relatively good health and not on any pharmaceuticals. We do not plan on AL or NH. I'm retired with no pension, small social security, overwhelmed and with limited resources. I wish I had been more aware of the 5 year look-back when she was 92. Who knew she'd have longevity - her younger siblings and husband pre-deceased her. Thank you very much. I'm grateful for all your feedback.

Igloo, Medicaid covers in-home services, supplies, adult day health programs -- lots of stuff for people to live in a private home and be kept out of a nursing home. There is good reason (for some people) to apply for Medicaid even if not intending to go to a nursing home.

In this situation, since the length of time Medicaid would be applicable would be relatively short, I'm not sure that spending down and applying for Medicaid makes more sense than just spending the money on the items needed for in-home care. But in general you don't need to go into NH to benefit from Medicaid.

I would think non-extravagant furniture to replace old broken or worn out stuff would be OK as a normal living expense, but you might want to actually communicate with the Medicaid people or even an eldercare attorney on it. Some offer free consultations. Gifting over the limit will typically result in a penalty period before Medicaid will pay anything. I had a vehicle we owned modifed to accomodate a wheelchair for mom using mom's money, and was told by our eldercare attorney they would probably disallow that and we would have had a penalty period, but in our case it was the right decision to go ahead with that as otherwise she would not have received some medical and dental care or been able to go out with us the couple of times we did. You are right to be careful!

Hilkay - I'm confused, if you are planning on continuing to have mom live with you and have decided that there will be no AL or NH, then she won't need to apply for Medicaid as there is no NH to pay for. So no Medicaid look back to fret over.

Medicaid is limited to the very poor. The income and asset limits are at about 2K for each, so if mom has CD or proceeds from the sale of her home still in her bank account, all that would have to be spent down on her care or her personal needs to the 2K/2K limits. Each state sets their exact amount, my mom is in TX and it's $ 2,094.00 for income and 2K for assets. Some states have these lower.

About the gifting to granddaughter, personally I'd wait and not to be callous about this, but @ 98 every day she is beating the odds and the probability is that can't stay that way for too much longer. But what you could do is have her bank account be POD in the granddaughter's name as the POD. That way when she dies, the account goes completely to granddaughter and byspasses probate. If her burial is all prepaid and she has no property, there is no real need for $.

About the chair, I'd ask her MD for a prescription for another lift chair and then find a place that has a chair you like and an accompanied table, order it and pay for it from her assets. Let the MD know it's private pay, he'll probably write it up as "patients choice" so you can pick what you want and works for her. When I was doing the spend-down for my mom, I got her a tricked out Hugo walkers, extra glasses, hearing aids, etc as once she got on Medicaid these would either not be covered or what Medicaid allows is the absolutely cheapest ones. Good luck.

I take it that you are planning to apply for Medicaid for her, soon?

Gifting the granddaughter would probably create a penalty situation with Medicaid.

Her money can be spent on anything for her, but not on gifts. Is she paying for the in-home care you have hired? That she can certainly pay for. I think the furniture is a little less clear. If she were in her own home furniture would be fine.

I hope someone else can clarify the furniture question.