How Can Mom Legally Get Rid of Money in Bank?

Her money should be kept for her care. Medicaid is for people who have no money. I used what Mom had to place her in an AL and later was able to pay privately in a NH then go on Medicaid.

My daughter will tell you residents are not treated any differently if private pay or on Medicaid. I found this true but, when Mom was private pay she shared a room. When she went on Medicaid, she was put in a 4 bed room.

She can legally "get rid" of her assets by spending them on her care. If she eventually gets admitted to a nursing home, ALF or MC, that money should be spent on her care while she is there. If she exhausts her assets, then file for Medicaid. If her assets don't run out, the balance will get distributed according to her will.

Pardon my failure to understand… Why does she want to “get rid of” her money? Being able to pay one’s own way in their later years is generally considered a good thing.

15k rule totally, like 1000% totally, is related to IRS gifting regulations.
Medicaid will transfer penalty $ gifted against her Medicaid application.

Should she apply to LTC Medicaid as she needs to be in a facility for her level of care, so she is “at need” medically for a facility that participates in LTC Medicaid program, Medicaid will require 5 years (3 yrs in some) of all her banking info and all info on any assets she has and documentation on her income (like annual award letter from SSA). If she owns or owned anything “real” property (house, land, car) info on this will be just keystrokes for the Medicaid caseworker to find as stuff like this all dovetails into state database. So no going an buying a fancy new $$$$ car or giving it yo a grandkid. If she gifted or transferred $ to others, it will surface eventually AND will trigger an in-depth review of her application and place a transfer penalty (based on days ineligible) on her application.

Transfer penalty IMO is a real swamp to get in as in order to apply for LTC Medicaid you have to be in a facility, so they are building a bill every day there and when the penalty gets placed, it could be 1, 2 or 6 months later, $$$$, and that facility will do whatever it takes to get bill paid.

She would need 2 gift this summer and not ever need Medicaid till Fall of 2026. That is a long, long time.

If it’s on the imminent horizon that shes needing a higher level of care than you can ever provide in your home, IMO, it’s too too late to do any ahem “creative” Medicaid planning. That ship 🛳 has sailed.

She can legit spend down on things she needs….. like a preneed funeral & burial policy, dental work (as Medicaid doesn’t cover this & dental could easily cost 30-70k)), new hearing aids, eyeglasses, a speciality Walker, etc. She can meet w an CELA level of elder law attorney to update all her legal and see IF there is anything she could plausibly do now and be ok for how Medicaid runs in your state. Like she does a personal care agreement with you to pay you for caregiving or pays you rent & all done so reportable income for taxes. It’s not a DIY. But again if higher level of care is needed soon, she’s gonna first & foremost need to spend down assets & use her income till she’s impoverished & eligible for LTC Medicaid. It’s the harsh reality.

She can however pre-pay for a funeral.

Apples and oranges. You are mixing up two separate issues. The $15K gift idea comes from the FEDERAL TAX code. Yes you can give certain amounts of money away without TAX consequences. However you probably didn't come to this site for tax advice. If you want to help someone qualify for taxpayer funded Medicaid the laws are entirely different. A person doesn't just give away all that quantity of assets and say to the state "Now I'm ready for all of you to pay for the rest of my life". The STATE rules for Medicaid vary but it is safe to say that a person would be penalized upon applying for Medicaid having given away their assets in that manner. To get proper advice you need a qualified elder care attorney experienced in the appropriate state's Medicaid laws. It's apples and oranges when it comes to giving assets away. Don't mess this up.

I'm going to say a big NO to gifting of any kind. What she can do is pay people the going rate for her care and accommodations and pay for any devices (wheelchairs, walkers, bath seats, grab bars etc etc). It's probably wise to see a lawyer to set this all up properly.
Beyond that - One of the people who used to be a regular on the forum said all our lives we save money for a rainy day and momma, it's pouring! Isn't the reason people save for their old age so that they have the money to pay for care if they need it?