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Dad is in a nursing home on medicaid. Mom still lives in the family home. She has a small savings account and wants to be able to leave something to me when she dies. She really needs hearing aids, and I want her to use her savings to buy them since the state is going to take all her savings once dad dies anyway. Am I right?

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If your dad is already on Medicaid, then whatever spend-down needed for him to qualify for Medicaid to be done has happened. So any $ mom has is within & under whatever your state has set as the maximum assets limits for a community spouse (CS). The CS limit for most states was about 113K for 2012. The state is not going to come after mom's small savings account when dad dies as she is the community spouse. So if mom needs to buy new hearing aids, by all means have her spend her $ to do this.

You know if mom is impoverishing herself with the costs of maintaining the house and the regular costs of living and IF mom is NOT getting some of her spouse's monthly income diverted to her, then mom needs to request or do an appeal on this to Medicaid. In other words, if all of your dad's monthly income (like his SS check & his retirement) is going to the NH as his co-pay, that needs to be looked at to be changed. Mom as the CS should be able to get a set amount of $ that is her CRSA - Community Spouse Resource Allowance or her MMNA - Monthly Maintenance Needs Allowance; what it is called depends on the state. THink of the CSRA / MMNA as alimony for the NH set. If mom is not getting this diverted to her from dad's monthly income, please look into getting this done asap. The whole Medicaid asset / income rules for a CS are very different than for an widow or widower who goes onto Medicaid for NH. Often billing @ the NH overlook this, or the CS does not do the paperwork needed for this as they are just focused on dealing with their spouse in the NH. Mom should not be impoverishing herself.

Now another thing to be on the lookout for is MERP - Medicaid Estate Recovery Program - once dad dies. All states have to have MERP in place and how it runs, too, is different for each state. But whatever the case, your mom as the surviving spouse is entitled to a full exemption to any MERP claim or lien on the house. Some states have the details that there is a surviving spouse within their database and don't do a follow-up. But other states require that any MERP exemption, exclusion or hardship be done in writing & in a certain timeframe otherwise they will place a claim or lein on the property by default. So you want to yourself be on the lookout for this for your mom. Good luck.
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If the savings account is small and there has been no request for the money, the state is most likely not interested in it. When there is a spouse remaining in the home, the state has no interest in impoverishing him/her. There will be a reasonable amount left to live on. If she needs hearing aids I would say it would be fine for her to buy them. You might want to double check this with the Medicaid people, because I am not an expert in these matters. Any money that was of interest to the state would probably have to be spent down prior to your father receiving Medicaid.
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