What are some allowable items to "pay down" assets for Medicaid?

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dgcctoth Asked September 2020

What are some allowable items to "pay down" assets for Medicaid?

Mom (91) moved in with my husband and I recently and we are selling her home. Once all debt has been paid she will still have a substantial amount of money. Besides the obvious things such as rent, groceries, personal care and in-home help, what other items would be allowable for her to pay for if the need arises in the future for her to apply for Medicaid should she become incapacitated and need further assistance than my husband and I can provide?

Elder Law Financial Planning Medicaid Medicaid Spend Down

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score 0 · Answer 1

Talk to an "elder lawyer", they can help you and her set up an Irrevocable trust and associated bank account. Then you can transfer money into the "trust" funds (there are daily limits on the transfers) so that money is no longer considered hers. Then the money can be used for her care as needed. I don't believe rent qualifies, but the elder law attorney can give you the allowable items. We had to do this for my Mother in Law and it actually gave her a lot of peace of mind to know she didn't have to spend all of her money from her house right away. Best of Luck.

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Yes rent would be a legitimate expense.

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score 4 · Answer 2

Bridger, it does look to me that the OP will be using her Moms money for her care. She is trying to keep her Mom out of a NH by caring for her. 100k will not go far in an AL or NH. About 10 months in a NH maybe a year or more in an AL. The way OP is approaching this is very good. She is looking ahead. She is not using her Moms money for anything she wouldn't be using it for if she stayed in her own home. She isn't hiding it.

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JoAnn, I think that it was the wording. People think that paying for care is giving their money to the state or being robbed. That is always a problem for me, paying for care is what most people think when they are saving money, it's a rainy day fund and when we need someone to dress, feed, and help us it is raining.

Social programs are not the solution, they were never intended to be, they were intended to help people make ends meet, not pay for everything for their entire lives. I am not saying this is dgc's intentions or words, I am saying that the wording used is a hot button.

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score 1 · Answer 3

When you meet with attorney, ask about transportation to medical appointments, etc.

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score 2 · Answer 4

I believe if your mom needs new furnitures (I bought a electric bed for my mom to help her get in and out of bed easier after her stroke) and possible if you need to remodel her room/bathroom for her health needs, you may use her money for them (the remodel part I think maybe subject to different state rules, so check with attorney).

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If Mom does not own the home, you can't use any of her money for a remodel. Because you are the one who will eventually profit from it. Not sure about the bed either. If Dr finds one is needed, then Medicare may pay.

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score 0 · Answer 5

I would research an elderly attorney in the state you will be moving. Contact them and start the relationship.

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Yes I have already done that. Thank you.

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score 0 · Answer 6

Paying for care is what her assets are for. They are not being lost to the nursing home. Why should taxpayers for her care?

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I’m a taxpayer. She has been one all her working life as well. If taxes aren’t meant to pay for end of life then where?

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score 1 · Answer 7

First, the house must sell for Market Value. Keep good records on where the proceeds go. Keep proceeds in a separate acct. (Maybe a lawyer can help u with how you can do that) That way her Statement will only show what has been withdrawn for her. No gifts can be given even if its an ad on to ur house for her. Medicaid looks at it as you will profit from that ad on.

If she pays u rent, you should have an agreement written up. Same if planning on being a Caregiver and need to be paid. Spend down, can be her residing in an IL, AL or LTC. It can be prepaid funeral expenses. But you say the proceeds will be substantial. For me I would use it on a nice AL and if a LTC facility is needed, private until its gone and then apply for Medicaid. If u don't think Mom will need Medicaid within 5 years, then ask about a Trust being set up.

Now, if you feel Mom will not need Medicaid in within the next 5 years, there is really no problem. I would see how the proceeds can be set up so they don't go to Probate.

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Substantial amount for her. Over $100,000 once the bills are all paid. The house is definitely selling for market value. No issue there. She will be living with my husband and me, no assisted living and once we move I will no longer be working full time and will be her main caregiver.

I do have a lease agreement written up by a lawyer already signed and I am looking into a personal care agreement to see if I can get “paid” a few hours a week as her caregiver. I believe she can also contribute to the groceries and other household expenses. And I plan on paying for some help to come a few hours a week so I can get a break

I don’t need or want her money but she is 91 and is rapidly declining. I prefer to see her use the money now rather than having her lose it all to a nursing home later. I’m hoping it won’t come to that but at 91 it’s highly probable that she may need one by the time she’s 96.

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score 0 · Answer 8

This is a question most accurately answered by an elder law attorney who does estate planning and is well versed in Medicaid for her state. It's definitely worth the money for a consult, rather than crowd-sourcing an answer which may not be accurate or complete.

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Yes I am planning on reaching out to an Elder law attorney but we will be moving out of state within the next 6 months and I know the laws vary from state to state. I was looking for some general ideas now before we move then reach out to an attorney once we are settled in the new place.

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What are some allowable items to "pay down" assets for Medicaid?

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