My father passed away on March 6th. My mother has NEVER lived alone a day in her life and has been pretty adamant that she'll not want her independence (when I've mentioned a nice little apartment complex literally 3 minutes from my house). We are without question having to sell their townhouse as it is 50 minutes away, it is too much house for her, and...she's been living with us since my father passed. Our home isn't exactly large, and we are considering using some of the funds from the sale of their house to fix up our basement as her own little space...an idea she likes. I see all sorts of advice for elder attorneys on Medicaid and the 5 year rule and all of that. Would this apply? Is this her "gifting" us money to fix up our house? What kind of hoops does anyone think I may have to jump through to make this happen? I hope this makes sense and thank you in advance.
As for Medicaid, I would make an appointment with an "Elder Law Attorney" as they know how to figure out the maze called Medicaid. He/she could give you suggestions. And while visiting the Attorney, get Mom to up-date her Will, her Power of Attorney [your Dad's name may still be listed as her POA]. The Attorney may recommend a Medical Directive which will spell out how your Mom wants to deal with the final journey of her life, etc.
My heartfelt sympathy to you and your family for the passing of your Dad.
I think it would be considered gifting if she gives you the money, but that might be offsets. I think this really is, as you surmised, a question for an attorney to ensure that it wouldn't be considered a gift.
It's very kind and thoughtful of you to consider accommodating her needs this way though.