Hypothetically, Grandma gifted the down payment for a house to grand kid. One year later Grandma goes into NH and has to go on Medicaid. Grandma is not on the deed to the house. Medicaid considers the gift as an asset transfer and want the money back after her death. Can they force the sale of the house if grandkid can't afford to give the money back?
So as you can see, only the "lookback period" of 5 years applies to gifts, not "estate recovery,'' which is when the state wants to be repaid after a Medicaid recipient's death.
Grace + Peace,
Bob
Grace + Peace,
Bob
Parallel topic although off topic from the thread: many folk believe that if a married couple has one healthy person, say dad, and one that needs nursing care, which would be mom in my example, that if you "divide the money" and spend mom's half on her care that then she will be ok'd for medicaid and dad gets to keep his "half." Not True..Let me make that NOT TRUE. There is a half a loaf possibility but you will require an elder care atty to handle it as it is complicated. Presently the healthy spouse gets to keep UP TO about $120K in countable assets plus the house and a vehicle, and the spouse who applies for Medicaid must have no more than $2000 in countable assets. That is a very broad oversimplification, but it is the gist of it.
The key is don't spend down before applying for Medicaid. There is much, much more to it, but just saying again: costs nothing to apply for Medicaid and then in any situation, at least your foot is in the door.
Grace + Peace,
Bob
They'll want the money now in "self pay", not at her death, at least in our state. Plus, there's could be a penalty - in our state, that effectively doubles the amount of the gift in what your grandmother would have to "self pay."
Check with an elder law attorney in your area to see if there is a way out of this for your grandmother. The grandkid may have to buy the house immediately at fair market value, but that's just speculation. Check with a lawyer.
. Grannie -since she gifted $ & is now impoverished - will meet the financial qualification for Medicaid (usually 2k in non exempt assets & 2k income) but will be ineligible for Medicaid to pay due to transfer penalty.
Penalty has an equation based on whatever your state pays facilities as the Medicaid day rate for room & board. As Medicaid is uniquely administered in each state, this amount varies by state. Like TX is roughly $ 155.00 a day, so Olde Bobs 25K = 161 days of ineligibility.
The ? then becomes do you clear the living room out or your sons old bedroom out to make it grannies room for the next 5 1/2 months???
When hubs applied for Nh for his mom, she had slightly over 2k in the bank. The medicaid caseworker for the NH, refused to take the application as it would be denied. Instead she was to spend down ASAP to get her next bank statement to under 2K & then turn in application with a new date & could be approved & retrod to day 1 of NH admission. NH ok with this too. What he was told was that a denial triggers all sorts of other compliance to be done & a denial with subsequent spend down & it's reporting was to be avoided if at all possible. individual Medicaid financial, although with reams of paperwork is pretty straightforward....you have to be impoverished, within 2K non-exempt assets& within whatever allowed for income.
Couples Medicaid is awhile otherbstory & imho really calls out for experienced legal & planning from a NAELA level atty as it can be quite complex to maximize the community spouses options. Yeah there are some things they can do on their own - (like changing life insurance beneficiaries from each other to kids or grandkids) - but doing creative, like medicaid compliant SPIAs (& this coming from someone who usually hates, hates, hates annuities but SPIAs can be ideal quick fix for a healthy younger CS with exce$$) really need knowledgeable professional expertise to do. NAELA is the platinum standard & they will have FA that understand nuances of medicaid compliance. Not a DIY project.
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