Medicaid look back window?

As other people have posted here, Medicaid planning with an Elder Law Attorney in your state now can bring benefits that you hadn't imagined, and prevent problems in the future.

If your mother in law needs Medicaid eligibility in future years, a Caregiver Contract in put in place now can be used to document the payments to your wife.

Does the Medicaid program in your state provide hours and services for home care? That's another question to ask the Elder Law Attorney.

In my practice, we always look to keep the client in the least restrictive setting, and Medicaid paid home care can help do that.

If the client needs to transition to a nursing facility in the future, the application is converted to Long Term Care with updated records that verify the client and family have been complying with the income and asset regulations.

The amount of relief that my sister and I experienced when we saw a certified elder care attorney can't be described.

It cost only a small retainer, which she credited toward an updated PoA that we needed, and her guidance (including don't let Mom's funds run down too low before you initiate the Medicaid process because it takes a while) was invaluable.

Do a caregiver contract and proper taxes. This will prove that it is not gifting.

I would consult with an Elder Law Attorney. I was given advice to do that as my mother was getting older and it was the best advice I could have been given. They know all the laws for your state and can give you wonderful advice. Our Elder Law Attorney ended up saving us money with her advice and it was so wonderful to know everything was being done correctly and I had nothing to worry about.

We used private caregiver so I had her get an employer ID # as Sole Proprietor and name her business. It only cost our friend $86.00 to get this done by accountant and only took a few minutes. Your wife can pay the business. Example: Name it Carol’s Care. That is who the check should be made payable to. I kept records to give to Medicaid for Mom’s spend down to Medicaid. It was completely straight up and Medicaid accepted it. I did not do W-2s. I just typed the breakdown each week. This way, the caregiver paid into social security herself when she did her own tax preparation. Giving herself a business name was the key. It was straight up and legal.

Does your wife report the earnings she receives? More than likely, no. Yes, this can create some issues if check is just made out to your wife and not reported as income. It can be considered a gift. Talk to elder attorney and set it up correctly. Do it now so you don't create a penalty period (where Medicaid will not pay) later on.

A caregiver contract is the answer. Unfortunately, caregiver contracts cannot be retroactive. Here's a good article
https://www.caregiver.org/personal-care-agreements

When we applied for Medicaid, they only wanted explanations for large cash withdrawals. Small cash withdrawals were not questioned. If your MIL has been paying your wife by check, total up how much she has received. If Medicaid considers them gifts, they will ask for a penalty to be imposed equal to the amount they considered to have been gifted.

You only have to worry about payments made in the five years prior to your MIL's application for Medicaid. You will save yourself a lot of trouble by learning the rules and acting as if a Medicaid application is in the future.

Medicaid rules don't favor family. That's been my experience. When you apply for Medicaid, they are supposed to look at the last 5 years of financial transactions, but often they look at a smaller number of months, say the last 6 months. They are looking for red flags -- usually $500 or more that isn't going to your mother's care or her expenses on her home, etc. If your mother owns a home, that will need to be sold and proceeds used for her care in the LTC facility prior to receiving Medicaid...see a Medicaid attorney about this.

As it comes to receiving money to care for your mother, that's considered a gift. I have a mother in a nursing home 75 miles away, and for the year before we sold her house, I traveled there weekly to oversee the house. I paid myself $300 a month for my time and the gas, etc. The Medicaid attorney (not elder care attorney!) told me this was not allowable and to stop, so I did.

Please, please see a Medicaid attorney NOW so you know what the rules are. Best!!

I agree with all the above--it's time to set this up in a manner acceptable to Medicaid. There may not be anything you can do regarding past payments, but if you have evidence (such as checks) that show the same pattern of amounts and frequency as what your wife will continue receiving from your MIL, then perhaps there is a slight chance Medicaid will accept at least some of this as evidence. Have any bills or receipts (or a diary of some sort) been saved from the past to serve as evidence of the help your wife has given your MIL? In addition, you might also want to save this agingcare string as evidence of your effort to rectify the situation, as you'll have nothing to lose and just possibly something to gain by presenting all the evidence and relevant information.

I believe that you can prove past payments were payment for services provided by showing that you claimed the money as income on your tax returns.