Quick background. Mom is in nursing home. Medicaid was approved and we are currently in penalty period. I am trustee of Mom's Irevocable trust. Mom has annuity that pays part of the monthly rent on her nursing home and it's my understanding that I'm supposed to pay the difference with her personal checking. Every month I've paid her balance with her regular checking account. That account is now down to under $700. Next month the amount we owe the nursing home is more than $700. Which means her regular checking account will be exhausted.
I'm a bit confused about this part. As the trustee or her Irrevocable Trust, I believe I'm supposed to pull money out of the Trust and use it to pay Mom's nursing home bills. My concerns are 1) I know I can't deposit that money directly into her account. I need to put it in my account first, right? 2) If I understand correctly, then I deposit my money into her account to pay the bill. 3) Will Medicaid be OK with me "giving" my Mom $700 of my own money to pay her bill? Does my deposit need to be directly offset by the Nursing Home bill? Will it be a problem if I have to do this every month? 4) Would it be better if I use the withdrawal from the Trust to pay the Nursing Home directly from my account? 5) Can I deposit more than the $700 she owes this month, ie $1000, so that I can build her checking account back up?
Thank you in advance for any help anyone can provide. It took lots of time and effort to set this whole thing up. I just don't want to mess it up with a stupid mistake. My lawyer didn't explain this part very well.
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BUT and this is imo mucho importante....
if your mom is actually in an AL or most MC, they are not an actual true skilled nursing care facility. If your in AL & most MC, you are viewed as needing assistance with your ADLs. You can function day to day but with a bit of help. You can get kicked to the curb. Most places won’t do this as it lousy optics and bad PR. But what they do instead is find a reason to have mom go to the ER via EMS. Like it appears mom had a TIA (transient ischemic attack). TIAs can be very subjective. So mom goes off via EMS to hospital and then the facility will not take her back. It then falls on the discharge planner at the hospital to try to find placement & you should expect the planner to call you to take her home if her old place won’t as a first call out.
If you know your mom will have zero $ to make up thevshortfall from her SS$ in very near future, I’d really suggest that you speak with the social worker at the place as to how the transition to the benevolent fund is done. Hopefully place has a huge endowment that’s well invested so easily pays for the impoverished long term residents.
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Hugs 🤗
Your questions/concerns are the same that I have:
"I have a fuzzy recollection of the lawyer saying that I could use the $$ in the Trust to pay Mom's expenses if the need arose. They did caution that I could not use that $$ to pay my mom directly. So now we have reached the point where I definitly need to use some of that money but I just don't know the correct way to go about it. I'm terrified that the Medicaid approval will get messed up."
I write a check from the trust and deposit it into mom's account so that with her pension and the special rep payee SS account, the fee and incidentals would be covered. When we sold the condo, the attorney had indicated to me that I should NOT be depositing the money into mom's account, so that if/when she needed NH, it wouldn't be a gate to Medicaid.
Okay, fine, but my concern is putting this money into MY account and then paying the remainder needed from there would be easy enough, but how does the IRS and state view this? Income to me, that I must claim? I don't want that on my plate!!! I have enough to deal with now. Also, while I would be "paying" that remainder, wouldn't Medicaid question who is paying the residual? How does it not been seen as "gifting" any more than depositing it into her account and paying from there?
The other issue I have with all this is that Medicaid IS for people who do not have the means to pay. I firmly believe that if someone has the money, trust or not, they should be paying their own way. Does that mean I might not inherit anything? So what? Inheritance isn't guaranteed for anyone! Granted, NH cost much more than MC, but again, if one has the funds, one should pay one's own way, in my opinion! My brothers may not agree, but they don't manage any of this, never say anything and don't do much at all for any part of this journey. It was mom's (and dad's) money and should be used for their benefit.
When the condo sold, it was a living trust, so most of the proceeds came to us, however we put it all back into the trust. It did mean having to pay some capital gains, but we used trust money to cover the extra taxes (and then have to claim that money too!) These EC attorneys charge enough for their time, they should be willing to give good, solid advice and answer questions so that all is done correctly. I still don't really understand it, but again, I don't want those funds coming through my account!
If someone out there has a REALLY good explanation, time to chime in, as I am sure OP and I are not the only ones with this issue!
So glad it is straightened out, and I so agree to keep it as absolutely clean and question free as you can. I am relieved you got good news today.
I am POA and Trustee of Trust for my brother, and it is so so so so simple. Compared to yours. But it still drives me just nuts and I am so worried I will mess up that I copy everything, keep everything AND write a diary of everything and account book as well. Simple as it is I will need a Mack Truck to haul "proof" to any court that every questioned it.
I will say this all is an education I never wanted at age 77.
The “cant pay her directly” the atty said, is cause it gets looked upon as “income”.
85% annuity payout that covers expenses is pretty good - she must have sold a pretty pricey home - if you add in her SS$, how short is it to cover her monthly? If it’s pretty close, I’d try to get the siblings to pay the difference to the NH directly. & leave dealing with the Trust out of this, it sounds super sticky and with remainderman stuff. Remember if it’s irrevocable, when she finally dies, unless state made her change successor beneficiary stuff, you kids get $. No MERP in theory as trust pass outside of probate, it’s not an asset of her Estate, is my understanding. Some states do go after Trusts tho, it something to clearly ask your MIA attorney.
I too hate hate hate annuities. Folks buy them, don’t understand them and do it out of fear. & hear what they want to hear for annuities being “allowed” for Medicaid. Meanwhile hefty commissions made till forever. Any crossover between the law firm & the insurance agent who sold the annuity?
so there’s 3 income sources for mom? $ paid by the annuity, $ in the Trust & then her Social Security income? Is that it?
If so, can the annuity pay out and the Trust pay out each month whatever $ amount she has as a shortfall from her SS income to totally pay her NH bill? They both get done as a scheduled deposit first of the month into her checking account that gets her SS$. Then you as her DPOA and signature on her checking account write a check from her checking to Shady Acres NH to cover that months bill.
Why? Heres my understanding..... you do NOT want to deposited a check from your own in your name bank account into mom’s account. It looks like you are paying mom and so it’s income to her.
AND PLUS
if you write a ck to yourself from her account, then go & deposit that ck into your account, it on the surface looks like you are signing checks to yourself so your gifted funds from her account to you. Both of these aren’t your intention but that’s what it looks like. Comprende?
Also the idea of “building” her account so it has a good bit of $, bad idea. For Medicaid, they cannot exceed 2K a mo in non exempt assets for almost all states but a few (NYS) . If she starts her mo & ends her mo (after paying NH) over 2k, and those bank statements are submitted for her renewal. She’s over Medicaid max. She already has some sort of transfer penalty drama happening, don’t add to it by going over the 2k.
I’ve just got to ask, what type of transfer penalty does your mom have?
Like a non compliant annuity done? Or Irrevocable trust done but inside the 5 year lookback? Some other gifting of her assets?
How many days is her penalty period estimated to be?
Did the atty clearly review with you that the penalty is by # of days but based on $ amount penalized? Will mom’s sources of funds be able to pay out for the entire penalty period at current monthly rate?
It’s a math problem & if mom should come up short before penalty period is over, then you or other family will need to pay the shortfall if mom is to stay in the NH. If when you put pen to paper, it’s looking like that might happen, speak with your siblings as to their paying a share AND speak with NH billing as to what rate she is paying. Like if private pay day rate or it’s the lower Medicaid reimbursement room & board rate. NH may have discretion to accept the lower Medicaid rate if you can negotiate this. Usually it’s something the attorney does as part of dealing with the penalty and it’s fallout.
again, I’m beyond curious..... what’s the penalty on?
I also am not certain why the money cannot come out of the trust and be put into her account that pays the nursing home. As power of attorney for my bro I take money out of his CDs if needed and put them in his Trust Checking Account, which has automatic withdrawal of his AL monthly, his health care supplemental and etc. In other words the checking account is part of his trust also. I am unclear why accessing the Trust's money is so difficult. It should be transferrable into a trust checking account in Mom's name???? I am pretty unclear on what is happening here and wonder if the bank might not have information that would help, as well? Only thing I know for sure is that Mom and Daughter's monies must not be married together in any way here.