Medicaid Asset Protection

[mqflowers]

What is the name of your state (only U.S. law)? GA
Good Day,

I have to relocate my Mom from CA to GA, and she's going to need to go into a Skilled Nursing Home. However, her monthly income is not enough to pay for the nursing home, and she makes too much to get Medicaid.

Here's the deal, I need to protect her assets (she has $30,000 in a savings account), because Medicaid will want to take that. I was told that I could to an Irrevocable Trust to someone not related to her. I have a best friend that I could use, but who in the world would even want to do something like that if they have to count it towards their income tax?

Medicaid has some real jacked up laws, and I know that they also have a five year look back, etc. My brother took advantage of my Mom in October 2007 and had her to transfer $30K into his bank account. Well that money is gone and can be recouped. Medicaid will look at that and penalized my Mom.

I need to find out how to protect her remaining assets. Not too worried about her home in CA because it's in Reverse Mortgage and she's used up all of her equity.

Please advise.

 

[anteater]

I am unclear. Since you know about the five year lookback, how do you think that you can protect this $30,000 now without Mom incurring a period of disqualification?

I was told that I could to an Irrevocable Trust to someone not related to her.

Who told you that?

 

[mqflowers]

$30,000

I'm sorry, I didn't make myself clear. My Mom has an additional $30,000 currently in her savings account.

 

[Ozark_Sophist]

Her assets should be used to pay for her care. Why should the taxpayers pay for her care if she has the means?

What you are proposing to do is Medicaid fraud.

 

[mqflowers]

Protecting Assets

I have been researching and see that people protect their assets all of the time. I didn't think of it as being fraud. My mother has paid into the system for over 50 years and I don't see why, just because she doesn't have enough income to pay for care, that she should have to spend the money that's being used for her bills, medicare supplement, etc.

If it's considered fraud, then how is it that people are utilizing attorneys to hide their parents assets, etc.?

 

[anteater]

I'm sorry, I didn't make myself clear. My Mom has an additional $30,000 currently in her savings account.

That is the $30,000 that I was referring to. A transfer of that money will be subject to the lookback and potential disqualification.

And you never did answer this question:

I was told that I could to an Irrevocable Trust to someone not related to her.

Who told you that?

 

[anteater]

I have been researching and see that people protect their assets all of the time. I didn't think of it as being fraud. My mother has paid into the system for over 50 years and I don't see why, just because she doesn't have enough income to pay for care, that she should have to spend the money that's being used for her bills, medicare supplement, etc.

If it's considered fraud, then how is it that people are utilizing attorneys to hide their parents assets, etc.?

There is "Medicaid planning" that can be done. But, it is just that: planning. It needs to be done well in advance of any possible need. A person cannot just give away assets and expect to qualify for Medicaid assistance the next month.

 

[mqflowers]

Planning

Okay, how do I go about Medicare planning? My Mom is 79 and I will have her live with me until it's unbearable. I would say that she has maybe 5 to 10years, if she lives that long.

I know for me and my husband, we have LTC and its the best investment that we've ever made.

 

[anteater]

Okay, how do I go about Medicare planning?

Consult with an attorney with experience in estate planning and/or elder law.

 

[mqflowers]

Irrevocable Trust

In my research, I am reading where people to irrevocable trust and I am reading where the rich do it all of the time (protect their parents money, etc.).

If it is fraud, then why are attorneys practicing asset protection and charging people between $500 - $600? A prime example, the website below:

Hide My Assets from Medicare

And there are many others out there.

 

[anteater]

If it is fraud, then why are attorneys practicing asset protection and charging people between $500 - $600? A prime example, the website below...

Medicaid planning is a perfectly legitimate process. All that I have said here is that there is no magic wand that transfers assets from a person and allows that person to qualify for Medicaid assistance without running into the 5-year lookback and possible disqualification. As the website you posted says:

My answer is that if they did not do something as far back as five years ago, chances are that trying to do something now, could very well be considered a fraudulent conveyance in order to defraud a potential creditor.

So, if you Mother wants to take her chances that she will not need Medicaid assistance within 5 years, she can go for it. Transfer her assets to an irrevocable trust... gift them... etc.

I am reading where the rich do it all of the time (protect their parents money, etc.).

Don't take this stuff too seriously. It's attorney marketing fluff. Make the middle and working class believe that there are "secrets" that are only known by/available to the rich. Trust me... The rich are not engaged in estate planning in order to qualify for Medicaid.

 

[mqflowers]

Thank You

Thank you very much for your assistance and feedback. I greatly appreciate it. As I don't want to do anything illegal, I will have my Mom reside with me and hope that she'll never need a nursing home. As I am not a big fan of them anyway, and I'll have to convince my Mom that she doesn't want to be in one either.

Thanks again.

 

[Kiawah]

Not a lawyer....but I've been through this process with MIL.

If she had put money into an irrevocable trust 6 years ago, then you'd be outside the Medicaid 5 year lookback. Doing it at this point, will create problems as she won't have the money anymore (because she gifted it to someone else), AND she'll still be on the hook to pay for the nursing home.

What you CAN do at this point and is allowed by Medicaid, is to prepay via an irrevocable trust account her funeral expenses (funeral home, service, casket, cemetary charges, etc). Check your state medicaid rules regarding this, before you actually do it, as there may be state regulations regarding the maximum amount that they will allow you to do.

But other than that, if she needs skilled nursing care now, she'll go through a spenddown period with Medicaid where she has to consume her assets before they'll agree to pay....spending down to a specific threshold. PA (my MIL state) has two different allowable spenddown levels, it depends upon her monthly income (Soc Sec, pensions, etc). Once she spenddown's to that level, then they'll allow her to keep a nominal amount each month, the rest of the monthly income going to her nursing home care...with the state picking up the remaining amount. Work closely with your state Medicaid group to help you understand the requirements.

With 30K, you really don't have that much to try and shelter (above the funeral home $$s), you'll probably burn thru that with the nursing home charges in the time it takes to get through the application process.

 

[mqflowers]

Spend Down

Yes I was told that I should prepay for a funeral, etc., but you have to be very careful even in doing that. As many have lost money because the funeral homes closed down, etc. Per my Mom's living trust and will, she wants to be cremated. Therefore, that won't be very expensive at all, along with a memorial service.

I was thinking about spending down the $30K now and pay someone to come out to my home to help out with her.