How do we spend down my aunt's assets so she is eligible for Medicaid insurance and can move to a nursing home?

You have an opportunity to choose one of the better Medicaid nursing homes and place her early. She can spend down in place when she is ready for Medicaid

On another tangent, what is the situation for her son?
The Son lives there full time and has been her caregiver, right?
So if she goes into a facility - whether private pay and doing a spend down to eventually qualify for LTC Medicaid OR she is Medicaid Pending from day 1 - does Sonny have his own home to move back into?
OR
is her home essentially his home?
Does Sonny have his own income? Like is he getting his own Social Security income ea month? Or he has his own savings or investments?

Depending on the answers, aunties applying for and eligibility for Medicaid may need to be looked at from a slightly different perspective.
Auntie does NOT have to sell her home. By & large for most states she would be allowed to continue to own it as an exempt asset for her lifetime. If Sonny as her heir, might be able to qualify for one of the exemptions and exclusions to Medicaids estate recovery system. It is not a straightforward process as to just what can happen. It is - in my experience - very interdependent on your States laws for property rights, probate and how recovery runs.

Jmhunt90: Perhaps you can garner much information on Medicaid.gov.

Pre-pay funeral and burial expenses. Trust me, you will want to pre-pay that stuff.

As many have said, you need to consult with an Elder Care Lawyer, but make certain that this person is a specialist in Medicaid rules for your state. The one we used was recommended by a counselor, but he was not well versed in the Medicaid rules. My will that he drafted has a provision for a trust if I should die before my husband, who has middle-stage Alzheimer's. Now I have learned that I need a codicil to my will to specify what type of trust so it will meet Medicaid's requirements. Also, he did not know how to compute the income requirement and the asset spend-down rules, and he misrepresented the five-year look-back process.

There are national companies that help a person apply for Medicaid, but they only use a computer to get the specific rules for each state. The person I talked with in an initial interview told me that PA does not allow excess income to be put in any trust. The initial consultation ended abruptly because my husband's income was over the limit. Since then I have learned that PA does all the excess to be placed in a pooled income trust account.

Be careful. Not all experts are alike.

I’m my sisters POA. When we applied for Medicaid I was required to pay off her cemetery bill & funeral home. Then I consulted an Elder Attorney. The remaining money was put in a trust Which I can request money when needed for any thing she might need. Money is hers to use without Medicaid involved. When my sister passes, remaining money goes to the state.

As others have noted, it is time to get with a licensed elder care attorney in your state BEFORE any decisions are made as once made -- and if made in error -- one cannot "undo" bad decisions. And "not knowing the decision was the wrong one to make" is NOT a defense that works with Medicaid.

If entering a nursing home now before one has qualified for Medicaid long-term care coverage; one enters as "private pay." Frankly, many facilities like it when one enters as private pay as the rate may be higher than what Medicaid pays and it is less paperwork for them as well. Someone (you? if you are the POA), would write checks or pay the nursing home from your LO's accounts (keep all records)....

Once the LO has spent down to below your State's Medicaid asset limit (might be a total of $2K, this limit is State-specific), then one applies for Medicaid long term care coverage. Usually your LO's nursing home if they are qualified Medicare and Medicaid facility (hope so) have folks on staff in their business office who deal with this and can help with the application itself. Lots of paperwork to submit so start collecting that now. And the facility on their end has to complete the "level of care" paperwork confirming to the State Medicaid folks that your LO medically needs the "level of care" that a nursing home provides.

If there are a lot of assets to "spend down" (home, condo, car, lots of valuable things) this is where it can be hard and take time as ALL of that -- given there is no spouse/no "spousal impoverishment" rules come into play -- can get tricky and can take time especially if there is a house to sell. But all valuable/tangible assets count towards the asset limit and are part of the spend down. So any proceeds from the house sale, sale of other things nevertheless go to pay the nursing home privately. Then once ALL the assets are liquidated and spent (paid to the nursing home); then Medicaid long-term care coverage comes in to take over paying.....

Moving forward any income (Social Security, IRA distributions, any funds inherited, etc.) are largely paid to the nursing home. States allow the person to keep only a minimal amount (maybe $85 or $90 dollars per month) but the LO's bank account has to remain below the state Medicaid asset limit. So one might have to buy a few things your LO just to keep their bank account below that limit (often about $2K) and keep receipts as each year your State Medicaid folks as part of "redetermination" will need to confirm what your LO's funds were spent on in the past year to continue qualifying for Medicaid.

As part of the "spend down," Medicaid as a Federal AND State coordinated program have various rules including the 5-year look back. This means, any financial decisions, spending, or actions made by the loved one (LO) seeking Medicaid long-term care coverage will be reviewed 5 years back. If there were efforts to "hide assets" (like gifting or giving away money and assets) this is a no no.

Yes, one may spend on a range of permissible things (lawyers fees for Medicaid and/or end of life planning; prepaid funeral expenses; living expenses, such as mortgage, real estate taxes, food, utilities, etc.; taxes in general, on and on). But if one is passing off funds or assets to family, friends, etc. this can be a big problem if the goal was to hide or offload such assets.

The State Medicaid folks will ask for bank records and receipts, including any retirement accounts (Social Security payments, IRS/401Ks); health insurance coverage and expenses, such as Medicare and/or retiree benefits or supplemental Medicare coverage; tax filings, valuations of home or other tangible assets, etc.) all going back 5 years!

Much easier if you have access to ALL your LO's accounts on-line now to be able to download documents. Regarding the son, they lawyer can help advise. But if not added to the deed (house?) 5 years earlier, likely he'll loose the house.

Good Luck w/this

I would move her in with Medicaid pending. If she owns a home the state will take it and if she has any vehicles they will require all be sold except for one. And they determine which vehicle that is exempt. I’ve been dealing with this since March if this year. I live in Indiana and the 1st nursing home used “Medicaid Done Right” to “assist and navigate” the Medicaid process. They were absolutely horrible and disorganized and no help whatsoever. Dad should have been qualified but was denied due to their negligence. We finally had his interview late Oct and are still waiting on approval. The first thing to do is get POA. You’re hands are tied otherwise. My prayers go out to anyone dealing with this. It’s hard enough to be a caregiver and POA but then the added nightmare of Medicaid just nearly put me in hospital too.

Put in the nursing home and pay for her care. When she is close to running out of money, apply for Medicaid.

I am going to make a comment..I have seen several comments that imply that Jmhunt90 is asking this so that money/assets can be saved and other family members get the benefit of the assets.
I do not see anything in Jmhunt90's question that indicates this.
The mention of spending down and the aunt was the "recipient" of the spend down.
If there is no spouse to get the advantage of items that were purchased and the person needs little else what can the assets be spent on is the question I am seeing.
Now I am one to see a "hidden agenda" in some of these questions but this one I am not seeing a "how can we hide as much money as we can so that the family can get as much as possible when old aunt Betty dies"
In any case my answer is the same.
Pay for the best care that is possible for as long as possible before there needs to be an application for Medicaid. Wouldn't you want someone to do that for you?.

In my opinion it is fraudulent and places the burden on us the tax payers. I have seen this done twice and ended friendships over it.

Is she going to move into assisted living or a nursing home? Or is she staying in her home and needing services to come in? First you will want to make an appt with an elder lawyer to discuss what assets she has, the laws of your state and legal ways of spend down.

Several ideas:

*Pre-pay for her funeral
*Maybe her bathroom needs remodeled to accommodate wheelchair or walker access
*Does she need a lift chair
*Does she need a tub that she can walk into
*Does she need clothing that is easy to get on and off

Moving her now as a "private pay" resident will spend down her assets.
Spending down assets has to be for her care, for her benefit in some way.
So the Skilled Nursing facility that you choose make sure they also take Medicaid some do some do not. She will get the quality care that she deserves and when assets run out she can remain in the same facility, same staff. (if she is in a private room she may have to move to a shared room so you might want to think about starting her in a shared room, advantage money will last longer anyway)
Pre plan and pay for her funeral.
But the others are right talking to someone qualified to answer the Medicaid question you have is the first thing to do. Either Medicaid or an Elder Care Attorney or both

Plan the right way: Get a consultation with a qualified elder care attorney without delay.

Medicaid lookback period in Road Island (RI) is five years. Check with RI Medicaid for their spend down rules eligibility. Every red cent must be accounted for.

May want to look into a Elder Law Lawyer and set up a meeting for a consultation. They specialize in these type of situations and with Medicaid. We are currently doing this for our 90 year old mother.

It sounds as though you really want someone in the family ‘to reap the benefits of spending down the money’. Not a likely option, and not fair to the taxpayer.

Each state runs its own Medicaid program uniquely. Because we aren't "professionals" here, and this is a global forum, you may not get accurate advice. You can find a Medicaid Planner (a private professional, not a govt agent) who can answer your questions.

Generally...

...most states have a 5-year financial "look back" period on the application (some states are 2.5 years).

...most states' Medicaid programs will only cover LTC (but not all states).

...Medicaid will scrutinize financial/asset "gifting" during the "look back" period, the amount and definiition of which can vary by state.

...your Aunt's assets should be spent on herself, her needs, health and well-being. Even consider that she can probably go into AL on private pay in a very nice facility that accepts Medicaid and stay there until she nears the end of her funds. At that time she can apply for Medicaid.

This may or may not apply to her state, and so she should contact a knowledgable professional who can review *all* her financial information and give the correct guidance.

My guess is that you can pay her existing debts, but you can check with Medicaid.

Admit her Now and spend down for by using nursing home care, self pay.