How much money can Dad put aside that the nursing home and Medicaid can’t take, $2000?

Yes, an applicant for Medicaid can have up to $2,000 in countable assets (i.e., plus a car of any value, a home, personal items, pre-paid funeral/burial, and some other excludible items). This figure has been in place for many years.

Setting up a trust more than five years in advance of applying for Medicaid is indeed a good idea. However, to be an excludible asset, it needs to be written (drafted) correctly. For example, it cannot permit ANY distributions of the trust principal back to the grantor (person who sets up and funds the trust) for ANY reason, although it is possible to permit distributions of income.

For more info on how to use trusts for Medicaid planning, I recommend my eBook "Trusts to Protect Your Assets from Medicaid", available here: http://medicaidsecrets.com/eBooks.html

Mom passed two years ago and fortunately, she had enough money to pay for her short stay in the NH and never needed Medicaid and there was enough left for a funeral. But it got me to thinking about how little $2000 actually is and what would my husband or I do if one of us was in a NH for years and our savings were drained to nothing. It isn't enough to pay for a funeral, bills, lawyers and other expenses before or after a parent passes. With a 5 year look back, it doesn't leave a lot of options of setting money aside at the last minute. Maybe we should all think about setting something up while we are younger? Would it work to put a small amount of money (say $15,00) in a irrevocable trust, knowing we could not manage or use it in our lifetime, but it would be there for family to use for a funeral?

LTC NH Medicaid non exempt assets are 2k individual & 3k couples.
For marriages with 1 in NH & 1 still Community Spouse, the CS can have higher non exempt assets & each state sets the ceiling for the CS amount with most having it at 119k but a few states have it lots lower.

Personally I think for a son/daughter dealing with Medicaid for widowed parent can totally be a DIY project if your dpoa & involved in their life. They basically have to spend down in categories allowed by Medicaid (their home, a car, care, prepaid funeral/burial, normal daily living expenses).
BUT for couples it’s way way more complex & I think the folks & dpoa are best meeting with elder law atty to look at options for what to do with assets A “May-Dec marriage” or “1 needing care like yesterday & the other looking great on ADLs even at 88” marriage pose different financial issues. The CS should never ever make themselves impoverished to get the other eligibile for medicaid. But how to do cleverly do that & be ok for medicaid needs insight from and atty & outside of the family.

For couples too when it’s your spouse that needs care, it’s especially difficult as you are likely overwhelmed from care plus your own life to really have time to find out what best to do with assets. Atty & advisors esp. worthwhile.

Type "Medicaid" and the name of Dad's state into your search engine. It will tell you what the maximum for "assets" is for a single person on Nursing Home Medicaid.

Have you filed an application with Medicaid on behalf of your father? Medicaid does not automatically "kick in".

Talk to the facility social worker and/or business office about this. They generally have lots of information. Just don't sign ANYTHING that makes YOU personally responsible for dad's bills.

$2,000 is the amount that is to be remaining when applying for Medicaid. It too, will be spent for their care. Part of the spend down can be used for prepaying funeral expenses, hearing aids, anything that is solely for their benefit. Medicaid allows the person receiving benefits to have one home and one car. If there is a home there will be liens placed on it for Medicaid Estate Recovery to repay amounts paid by the program (MERP).

AmyGrace - to me creating a “trust” that’s funded with 15k is a waste of time. Trusts have costs to set up and maintain. I think if you start asking around you’ll find that financial advisors have trusts starting at 800k-1M so there’s $ to invest to fund trust and pay its recurring costs.

If what your wanting is knowing that family will be able to deal with death costs, then doing a Medicaid compliant irrevocable pre-need funeral & burial policy at a FH will solve that concern. Traditional ones run 7-15k & cremation maybe 1/2 that amount. FH are used to doing these. Not all costs are included necessarily, like floral, minister or police detail. Single location situation, where FH & cemetery & headstone provider are adjacent and under the same corporate umbrella will be the cheapest. Often religious cemeteries - Catholic, Jewish - have their own costs and not at all included in the FH pre-need policy. The Medicaid compliance means the policy is under Medicaid limits for new preneeds written. I’m remembering it was like 8k for Texas. $ amount will vary by state, as each state fund Medicaid uniquely, but it needs to be under the Medicaid maximum. 

Medicaid allows for term life insurance policy. But the “face value” needs to be under whatever your state has set to not have Medicaid compliance factor in. Maybe 1k or $1500. If you make the beneficiary of the term life your kids, then they can use that $ to pay after death costs not covered in the funeral preened.

It’s important that the “face value” read to be under whatever your state has at the maximum allowable for Medicaid compliance. My mom had very very old 1k fully paid up term life; old enough so was paying a dividend that plowed back into policy as required by policy terms. Had no cash value ability. Dividend reported as income / asset for Medicaid annual renewal but amoritized over 12 mo so not an issue. When she died, it paid to beneficiary several times it’s face value. You can get these type of term policies done but probably need a better independent insurance agent to find one & place it for you. As long as term policy has no cash value ability and its face value is under Medicaid compliance limit, there’s nothing Medicaid can do to force a change to it. (If it’s over face value Medicaid limit, states can require changes or a surrender). You need to have beneficiary be someone who will use the $ to pay your after death costs and not just pocket $ for themselves. Beneficiary gets $ paid to them. If they decide to flat keep it and not use if for incidental burial costs or to pay atty to get probate going, or to use to upkeep your home till MERP/probate cleared, they don’t have to. Beneficiary needs to be someone other than your spouse that you absolutely trust. 

Where I live they take 80% of all income including any bank interest.

I don't know - but what I do know is you can call the Funeral Home and arrange to pay for his funeral up front. I did this with my dad because I know that if he had needed a nursing home, they would not have left enough for his funeral.

This was not considered hiding the money - this was making sure that everything would be taken care of when the time came. It is another option for "spend down" funds. And IMHO, it's vital.

Best your parent moves it into your bank asap. :/ Or else 'Big Brother' will scoop it up :[

Don't do that. Is $2,000.00 really worth the can of worms that would result? It would only get Medicaid to scrutinize everything all that more closely.