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BACKGROUND: Grandmother has been taken care of full time by Mom and been living in Mom's house for 10 years. Grandmother needs/has needed total care (highest need, on government classifications). Then she fell and became completely bed ridden and is in a nursing home. It is likely that she will never be able to return home.

*Grandmother paid basically only the power bill directly and accumulated the rest of her $1,000 SS checks into checking. Her balance was about 60k, down to 30k after few months in home.
*Virtually everything was paid by Mom. To help cover these costs and incidentals my Grandmother wrote checks with nothing in the memo directly to Mom... Virtually all of these checks will count as gifts and cause a penalty period before Medicaid will begin covering nursing home costs, correct?

I know all Grandmother's 60k (now 30k) is gone, but I want to protect my Mom's retirement who has very little cash to cover Grandmother's nursing home costs during a penalty period... I'm hoping that this is fairly standard and despite pour accounting Medicaid officials will see that this money was being used to cover expenses, which are demonstrable. These checks, did not come near to the total costs of running the house.

Course of action:
*Going to bank to request all the records they have for my Grandmother's account.
*Gathering these records and sitting down with an estate planning lawyer for an hour.

I've got a terrible feeling that there will be a 6, 12, 18 month penalty period that my Mom won't be able to afford nursing home costs... Is there any recourse to keep my Grandmother in care under such circumstances short of my Mom declaring bankruptcy?

Any other advice, or experience with the look back is appreciated?...
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MORAL (draft): Elderly relatives should setup a caretaker agreement with children, pay for virtually everything and accept that nothing they can save in SS will ever near potential nursing home costs. Their goal should be to keep their checking accounts under one month's nursing home costs.

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It sounds like an attorney specializing in Elder Care is needed. Does your grandmother's county/city government provide any consultative services in this realm?

Why do you expect the government to pay for your grandmother's expenses when she has 30k in the bank?

Your grandmother should pay for her own care if she has the money.

Do not expect someone else to pay for her care.

Welcome to the world of Medicaid lookback.

I had a totally bedridden family member and went to apply for Medicaid assistance. You have to spend down the remaining assets before you can be covered by the program. If you try to pass the assets to others, then there is a time penalty for eligibility. Each state has their own rules and regulations as to how they determine eligibility. You need to get the information from your state social services (or family services) office for your state. My family member eventually would have been eligible after I used the assets to pay for ongoing home health care, but Medicaid patients with that particular health status are usually directed to a nursing home which I did not believe would have provided better quality of care (especially with a complete change of "Medicaid approved" doctors, case workers, health care workers).

AnonymityBot said:   Is there any recourse to keep my Grandmother in care under such circumstances short of my Mom declaring bankruptcy?
The nursing home cannot simply push her outside in a wheelchair and lock the door

With medicaid, wouldn't it be smart for older folks to transfer their assets (house, cars, etc.) to one of their children 5-10 years before they will need medicaids services?

What state is this?

stormdog123 said:   Why do you expect the government to pay for your grandmother's expenses when she has 30k in the bank?

Your grandmother should pay for her own care if she has the money.

Do not expect someone else to pay for her care.


When an elderly relative needed nursing home care last year, I was surprised how enormously expensive the care was. Fortunately, the relative had worked until he was 65, had lived modestly his entire life, and had accumulated enough savings to cover the bills of nursing care. You might think that $30K is a lot of money, but it is NOT. Should you need nursing home care in Southern California, that 30K in the bank can easily be spent in a few months. Regarding your comment thatt OP's "grandmother should pay for her own care if she has the money", in this case, it sounds like OP's grandmother scrimped and saved her social security payment so she would have some sort of small cushion for future emergencies. Why do you think she should be penalized for living frugally when some other SS recipient spent her entire SS check and doesn't have any savings?

What is Mom's financial situation?

Some of the descriptives that you use suggest that your mother is an older, single woman ("everything was paid by Mom", not "everything was paid by Mom and Dad" + the desire to protect Mom's retirement).

Is your mother beyond working age? If so and she owns only the house that she lives in and retirement funds of less than $1 million, she is probably near judgement-proof. Even if she isn't, the debt that is incurred at the nursing home belongs to Grandma, not her. As long as she doesn't pay any bills from her own money, she shouldn't lose anything (as long as Filial Responsibility is not invoked, but that is rare).

As xoneiax said, the nursing home won't just push her out the door in a wheelchair. (They only do that to people who don't have a family that could sue for the harm caused.) If the bill doesn't get paid until Medicaid kicks in, that is their problem, not yours.

To avoid complications, your Grandma should have been designated as the responsible party

I doubt this is a rare situation, though it's possible that the bureaucracy doesn't care. Since we can't be talking about that much money, seems like you could claim the payments were for "rent"...

stormdog123 said:   Why do you expect the government to pay for your grandmother's expenses when she has 30k in the bank?

Your grandmother should pay for her own care if she has the money.

Do not expect someone else to pay for her care.
OP has already acknowledged that the Grandmother's $30k will be taken : "I know all Grandmother's 60k (now 30k) is gone"

As I understand it, the question is that since the Grandmother wrote checks to the mother to pay the Grandmother's bills, Medicaid is going to treat those checks as an attempt to shelter assets and require that the mother pay them back even though they were used for legitimate expenses and were not an attempt to shelter the grandmothers assets before she went on Medicaid.

My Dad met with an attorney to discuss how this whole thing works as my grandmother is probably looking at some sort of assisted care from this point forward. The attorney said that spending patterns are a large part of what they look at. If you suddenly start cutting checks to everyone you know, it will get questioned by Medicare. If you've been writing checks every month for the last few years for something like living expenses, then you are probably OK.

Without knowing what State you are in, nobody can answer these questions.

aadam101 said:   Without knowing what State you are in, nobody can answer these questions. CO. However, Grandmother is in an OK nursing home because it was a good value... Not sure how this will complicate things.

VicVinegar said:   My Dad met with an attorney to discuss how this whole thing works as my grandmother is probably looking at some sort of assisted care from this point forward. The attorney said that spending patterns are a large part of what they look at. If you suddenly start cutting checks to everyone you know, it will get questioned by Medicare. If you've been writing checks every month for the last few years for something like living expenses, then you are probably OK. This is tremendously helpful, thank you.

couponhed said:   Is your mother beyond working age? If so and she owns only the house that she lives in and retirement funds of less than $1 million, she is probably near judgement-proof. Even if she isn't, the debt that is incurred at the nursing home belongs to Grandma, not her. As long as she doesn't pay any bills from her own money, she shouldn't lose anything (as long as Filial Responsibility is not invoked, but that is rare).

As xoneiax said, the nursing home won't just push her out the door in a wheelchair. (They only do that to people who don't have a family that could sue for the harm caused.) If the bill doesn't get paid until Medicaid kicks in, that is their problem, not yours.
Mom and Dad have separate finances, house is in Mom's name. Both their assets are well under 1 mill, both are on fixed income and retirement age. Very helpful, thank you. My Mom hasn't signed anything with nursing home or paid any related bills. If my Mom does end up paying during a penalty period, she'll deposit money into Grandmother's account and Grandmother can pay as usual.

The 5-year look back requirement is a crap shoot. There is a huge difference in the type of home or care you get under medicare vs. one that you pay on your own. So while the gov't may foot the bill, expect your standard of living to decline significantly. This is one reason for investing in long term care insurance.

alamo11 said:   With medicaid, wouldn't it be smart for older folks to transfer their assets (house, cars, etc.) to one of their children 5-10 years before they will need medicaids services?

Yes, accurately predicting the future is generally a very smart thing to do.

This is a burgeoning trend financial planning, but most people, old or otherwise, don't really dig the idea of giving away all earthly possessions because they might require diaper changes and spoon feeding in ~ 5 years.

VicVinegar said:   My Dad met with an attorney to discuss how this whole thing works as my grandmother is probably looking at some sort of assisted care from this point forward. The attorney said that spending patterns are a large part of what they look at. If you suddenly start cutting checks to everyone you know, it will get questioned by Medicare. If you've been writing checks every month for the last few years for something like living expenses, then you are probably OK.

Agree, I used to work for a State long term care Medicaid office, and the lookback system wasn't really tailored for small fish. A contractor at a State college created the audit algorithm, but I think they were really looking for several thousand dollar xfers made within the last year, or tens (if not hundreds) of thousands transferred beyond 1 year. When I worked there, the big issue was the kids using parents funds to purchase property (primary residence would be exempt from lookback in my State). We had a case where a 80 yo old women supposedly bought 2 adjoining million+ dollar condos before she checked into a nursing home. The contruction wasn't even complete yet, but she "intended" to spend her golden years in a very trendy part of town. I think the kids actually won that case, but it is my sincerest hope they got destroyed in the housing collapse.

If you are talking about a few hundred dollars a month, spread out of several years, I wouldn't worry too much about it. If you want, go ahead and get as complete record of cash transactions you can, and have your Mom prepare what she condiders to be a reasonable monthly/quarterly budget of expenses she incurred during that time (food, reasonable rent, utilities, supplies, clothing, auto mileage for doc appts, errands, etc). If you are anywhere close, you should be fine.

How much money? Once a month? More?

You should be fine if the amount is reasonable for her living expenses (or below) and you can show a pattern that makes it clear what was going on (I.e. didn't start writing checks the week before she needed LTC).

If its higher, you get into the penalty periods.

BUT -- at least in my state, the rules say imposition of a penalty period cannot cause undue hardship on the senior. So your grandmother will still get the necessary care and won't be "kicked out" even if it came down to a penalty period being imposed.

If she's been writing checks for a few hundred a month to cover expenses, and understands her $30,000 is going to have to be spent down and used to fund her care before Medicaid kicks in, I don't think you have a serious issue here. Some finer details to workout with her caseworker, but shouldnt be unusual.

alamo11 said:   With medicaid, wouldn't it be smart for older folks to transfer their assets (house, cars, etc.) to one of their children 5-10 years before they will need medicaids services?

My parents, aunts, uncles, grandparents on both sides all died young -- too young to ever collect back a penny of payroll taxes paid into SS. My father and his brother did not even make it to see 50 dying of the same rare disease.

Expecting to live to see 65 seems like it is right out of a science fiction story.

Definitely hire an attorney who handles these types of matters. My grandmother lived for many years with my parents and only paid towards food. My mom was a co-owner of my grandma's bank account. The attorney was able to justify that a portion of the money in that account not be subject to the look-back, applying it towards back living expenses. What probably should have been done initially when she moved in was some sort of rent agreement, etc. rather than retroactive, but apparently they didn't want to have that uncomfortable discussion (my mom being an only child).



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