RSmith1232 Asked December 2019
Are stocks considered income when filing Medicaid?
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Our POA hits 5 years Oct for Mom when she is clear from Medicaid taking her home, but it was into 2016 when transfers to us were finished.
Mom and dad had them separately, he passed so we had to transfer his to mom, then mom transferred them to us, but it took a few months.
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so, that means that after her death, the estate will want to transfer the title to someone....that is where Medicaid comes in.
The exception is for a relative that lived with her and provided her care for at least 2 years. the house would not need to be sold at that point....but when it does sell, Medicaid will recover as much as they can
You raise some good questions on capital loss and/or gains as well. I think someone with these kinds of income producing assets is probably in an income bracket that exceeds Medicaid qualification in the first place, but most definitely these are questions for an accountant or elder law attorney versed in Medicare qualification.
Or what can be done is to transfer the assets to someone else well before the elder might need Medicaid. I saw that done when I worked in that area of law, and found it very, very offensive.
What about an income producing vehicle say for example say a REIT? There’s income that could be directed towards or assigned to medicaid expenses. Seems to me it might be counter productive to cash something like that out (in?). How would Medicaid handle or dictate how that should be handled?
If it was required to be cashed in (out?) resulting in a cap gain (or loss) who would sustain that G or L? and pay tax on the CG if there was any?
If one has to do a spend down can money be kept back to pay future taxes? Presumably for only one year (the first year). Are these stupid questions?
First, Medicaid does not ever take a house. Having POA for five years has nothing to do with them taking it or not. Five years is the look back period. You will be expected to provide 5 yrs of statements. So for you 2015 to 2019. Any large amounts will need backup to prove money was not given as a "gift". If so, it will either have to be paid back or there will be a penalty.
All assets will have to be liquidated. That includes IRAs, 401Ks, bonds, shares, insurance policies with cash value, annuities ect. Those shares u transferred will need to be cashed in and used for her care. You can prepay her funeral. You will need to spend down to the Medicaid cap in ur state, my state is 2k. This 2k can only be used for her. You can private pay till her money is gone then apply for Medicaid.
The house, she is allowed to keep the house but none of her money can be used for upkeep. Her SS and any pension will go towards her care. She will be allowed about $50 a month. Ea. State is different. So, if u plan on selling Medicaid requires u get Market Value. The proceeds will need to go to Moms care. Meaning Medicaid will stop, u will need to spend down again and then Medicaid will start again. If the house is not sold before her passing, a lean will be put on it. It will be satisfied at time of sale. You can not rent the house or have someone move in without permission from Medicaid.
Basically Medicaid is the same in every State but spend down amts can be different as other rules. You may want to sit down with a Medicaid rep and make sure how u need to handle things. I have just tried to give u an overview.