My uncle is on long term care facility under Mrdicaid with dementia. His daughter (DPOA) recently found US Savings Bonds (about $1,200 in value in his name POD to her. She wants to hold them until he passes and use them towards burial expenses. Can she do this or should she turn them over to the facility?
I was executrix for an aunt who loved doing E bonds both as a way of saving $ & as gifts - you name the occasion (graduation, wedding, birthday) she gave them and did it as co-owner and a few as POD. When she died, bonds where still being held by the persons she gave them to & by her. Why was varied: some had not matured (usually 30 years), some being held for college & some because they didn't know wtf what to do with them. Bonds showed her & them as co-owners. You DO NOT need both owners signature to redeem bonds, you just need 1 of the persons listed on the bond to redeem. So none of the bonds were included in her estate, they were the property of the co-owner, as you need only 1 person to claim ownership of the asset to redeem them. The co-owner claimed ownership.They were NOT my aunt's asset, this according to the probate judge. BUT the bonds issued POD (not as co-owners) would be part of her estate but not subject to probate because they were POD (like a bank account POD). If bonds are POD, you need a certified death certificate to redeem or re-register them. Also you do NOT have to redeem them upon the death, you as the POD can continue to hold them till the full redemption period is done (like 20, 30 years)
How the bonds were done & how they are held likely will make a big difference as to whether it's an asset (and for Medicaid review) OR they were a gift and before the 5 year look back AND what the intention was for the bonds. You should talk with an elder care attorney to see what the viewpoint is on bonds are for your area in dealing with Medicaid and probate later on. Also if Medicaid does a recovery action (like what MERP is) after death, it is done via probate court. So whatever doesn't go through probate (like a POD bank account or an enhanced benefit trust if your state allows for those) isn't subject to MERP. Understand?
BUT keep this in mind…tax wise bonds, I don't think, exist until redeemed or re-registered so I bet they really aren't going to show up on Medicaid financial radar. I was dealing with old school style paper bonds (before the electronic ones they do now) so that might have changed. The old paper ones if they are really old like from the 50's 60's & 70's don't exist in a tally somewhere, that's what we found out for my aunt's estate.
You need to look at the bonds to see maturity date. Redeeming them before then (could be 10, 20, 30 years) could cost.
One last thing, banks aren't selling bonds anymore. My late aunt would be just heartbroken about this! So most banks will not redeem them at all & you have to go to the Treasury Dept on-line to do this. Once you do this, then the $ from the bonds will show up linked to SS # & ID of whomever redeemed them. Good luck & let us know what's what.