How do you protect your mothers savings when she goes into a nursing home?

First of all I'd suggest you make a pot of coffee or get a adult beverage and spend some time reading the many articles on Medicare & Medicaid on this site and then scan through the many, many "how do I get paid / how do i pay" posts.

That being said, it's kinda central that you as your mom's DPOA & MPOA understand what Medicaid is.

Medicaid an entitlement designed for those who are "at-need" both financially and medically. For NH Medicaid they have to show that they are at-need for skilled nursing services & at-need financially so impoverished. Impoverished means usually with no more than 2K in non-exempt assets and within whatever your state has set as it's monthly income ceiling. Most income is about $ 2,100 a mo. But Medicaid as a joint federal and state program - but administered uniquely by each state - and each state can set the exact amount as an income max. For my mom in TX when I initially applied for her it was $ 2,064 as the maximum monthly income & now its $ 2,163. Over that they are ineligible…although in many cases they can work with an elder law atty to do a Miller Trust for the overage if their income source qualifies.

If mom has assets, they have to be spend down on her care, her needs or her property BEFORE she will ever be eligible for NH Medicaid. To ensure this the states do a required look back. Most states do 5 years and just how detailed its done all depends on just how your state manages it's Medicaid program.

Most NH will give you a list of items that will need to be submitted with the Medicaid application. The list from NH to NH could differ slightly. Why?….well NH seem to do their own internal review to determine IF they will accept them as a "Medicaid Pending" admission. They do enough of these so they can spot what could be an issue for eligibility. If so, DPOA or another family member may need to sign off on a financially responsibility contract to get them admitted.

There seems to be 3 main areas that come to a surprize to family base on my being on this site now for about 6 years.
1. There is no grey area on non-exempt assets. Either they get spent down and on things that are allowed or mom will be ineligible for Medicaid. If you anticipate an issue with mom gifting $, stop, don't apply yet and make an appointment with an elder care atty. Once you apply, you sign off for an all access pass to all mom's financial information including all banking info and her taxes. Anything that is tied to her name or her SS# or even her deceased spouse could be looked into.
2. If mom has exempt assets, like home & car, please think carefully as to what to do with them. Usually they are exempt assets for their lifetime under Medicaid BUT family will need to assume all costs on both and for the rest of mom's lifetime and then deal with probate and an estate recovery inquiry / claim / or lien on these assets after she dies. Again imho you kinda need to decide BEFORE the application is done. Why?……if you sell moms house it's so that you can control just how the proceeds from the sale of the home is used…like paying for dental care, getting new hearing aids and eyeglasses, preneed funeral, etc.
3. Mom's SOC (share of cost in Medicaid speak). Under Medicaid rules, they are required to do a co-pay of all their monthly income to the NH as their SOC. They are allowed only a small personal needs allowance each month, ONA varies from $ 35 - 105 a mo by state. There is no - none - nada - ditch of mom's $ to spend on anything. PNA is usually just enough for on-site hair salon and some toiletries replacement at best. Often a NH will bill for phone or cable which magically is the same amount as the PNA.

About the gifting penalty, it's not so much that Medicaid goes after the recipient of mom's $. Instead mom will be ineligible for Medicaid till the penalty period is over. If mom needs a NH, then someone in the family is just going to have to private pay for her care. Often the penalty is issued after they have been in the NH a few months (while application is processing). Then they get ineligibility letter. NH gets the letter too. NH will come after whomever in family they can to get paid. SOmeone in the family signed mom in and someone will be found responsible to pay. IF not, mom becomes a ward of the state and totally removed from any family.
Often family move mom back into their home till penalty period is over. But the past due at the NH is still out there and you are toast on getting her into a nice or nicer NH as the old NH stay will come up in her medical history.

Medicaid means they are at-need. No way around saving or setting aside money unless they have planned over 5 years ahead and into things that are totally medicaid compliant. Not a DIY project.

If your mom is ready for a skilled nursing facility or memory care right now, and she has savings, she will go in private pay, using her savings to pay for that care. That money, the savings, is for her care...not for your inheritance.

If your mom is not yet ready for a nursing home and is looking for ways to protect as much of her savings now there are ways to do this and protect at least some of her assets. To do this, it is best to see an elder care attorney who can advise you based on the laws of your state. Some possibilities include gifting money IF there is possibly more than 5 years before she will enter a nursing home (no gifting after 5 years, 7 in some), certain types of irrevocable trusts, exempt assets like one home and one car, and other protections.

As Igloo has stated (that is a GREAT post Igloo) Medicaid is intended for the poor and indigent. Having savings means she is not ready for Medicaid yet.

Angel

Basically, its very simple. If she hasn't protected the money 5 years before she goes into a nursing home, she is self pay. Medicare will not kick in until most of her money is gone, and the government expects you to show where every penny went in that 5 years. If she gifts each family member $10,000 within the 5 year lookback, there is a calculation used that will make her ineligible for Medicaid for a certain period of time. When they do go on Medicaid, they also must kick in all their income such as social security and pension and then Medicaid pays the rest.
I wanted to put Mom's accounts in my sister and my name ten years ago. My sister wouldn't do it (didn't care because she has lots of money). Mom wouldn't have cared, but I didn't fight it for fear of seeming "merciless" to the family. Now instead of just Social Security and pension, her savings is being drained ($11,000 a month) to pay for the NH. And no, I don't think it is being greedy for family to appreciate an inheritance from parents who worked and paid taxes their whole lives, lived frugally and saved and never took a penny from the government. It would be nice for hard working seniors to get some help at the end of their lives when there are some people who contributed nothing, ever, and get it for free. (just my opinion, but it isn't very fair that those middle class seniors who worked 60 years can't leave something behind for loved ones)

Luvabun, you have to recognize as well that Medicaid is an entitlement, as Igloo wrote, and was intended specifically for needy people.

Someone with savings might not be that needy now, so he/she needs to use that for his/her own care before relying on government assistance.

You've been given good advice here. The bottom line is: you can't protect the savings now. She will go into the nursing home having to pay the whole shot herself, until her savings is exhausted - then when she has no assets left, she will need to go on Medicaid. Seems unfair, but that's how it goes. There are many, many of us here on this site in the same boat, just with smaller dollar figures. For many of us, there is no inheritance, just bills to pay, and the nursing home to deal with.

Don't sell anything. No vehicles, no houses, no stocks/bonds - nothing - unless you sell them and use the proceeds to pay the nursing home - and document EVERYTHING. Because once Mom's assets run out, you will need to account for the sale of every single item and where the money went. Don't use the proceeds for anything else, other than Mom's care. Medicaid *will* check on it, trust me. My father sold my son an old junker vehicle for $300, which immediately died and had to be taken to the junkyard for salvage. Medicaid wanted proof from the junkyard that the vehicle had $0 value. *That's* how nit-picky it gets with Medicaid. They want an accounting of *every* asset sold, right down to the penny.

Angelkw….well I kinda enjoyed the double posting!!! lol

Lovabun - in rereading your ?, I'm going to guess that there is gifting issue looming …..in a nutshell this is roughly how the transfer penalty works:
It's an equation based on whatever your state Medicaid pays a NH for a daily room & board rate divided into whatever the gifted amount was. That gives you the # of days of ineligibility in which although they now QUALIFY for Medicaid (as they are now poor); they are INELIGIBLE for Medicaid to pay due to the penalty (from gifting). The penalty starts the day of the Medicaid application not the date of the transfer. As it takes weeks or months to process the application, they could be 3 -6 mos. in a NH before the penalty is issued.

As each state manages its Medicaid program uniquely, the reimbursement rate will vary by state. Now some states pay $ 200 / $ 300 a day reimbursement rate - mostly on the east coast. Some states pay a very low amount, like for my mom in TX, it was about $ 155.00 a day reimbursement. So say TX mom applies for Medicaid today (March 2016) but had fully transferred her home with a tax assessor value of $ 180K to you last year and then gave worthless nephew 20K 4 years ago. When mom applies for Medicaid, that is when the countdown on days of ineligibility starts. Mom has a 200K transfer penalty, which for TX means 1,290 days of ineligibility. But iin a $ 300 day reimbursement rate state, is only 665 days ineligibility. Either way the NH will need to be paid for that period of time…..At 5K - 15K a mo, it will be a sizable sum.

Now mom could wait a year to apply and then the 20K to worthless nephew would be outside the 5 yr limit. But there still would be the 180K house gifting.

For real property - houses, land, cars - getting around transfer penalty is pretty impossible as all is recorded locally and dovetail into state records. It's just a few keystrokes to find out when, to whom and for how much or how little. Often family will have to do a Quit Claim Deed to gift the property back to the elder to get them qualified for Medicaid.

For items gifted - like to worthless nephew - the DPOA really has to get very proactive to get whatever reversed or to get them to pay otherwise it will fall to the DPOA to private pay for their elder or move them back to their home. Often its grannie gave $ for grandkids college or wedding, and there is not way those kids are ever going to repay the $$. DPOA is kinda stuck although there is an appeal process. If elder was swindled, they can probably get the $ set aside if there was a police report or APS investigation done.

Really very little is outside of the radar as so much is tied into their name or their SS# or that of their late spouse as those in their 70's, 80's or 90's just recorded things this way. Loveabun, if you know there is going to be an issue and it's a good bit of $$ involved, please, please see an elder law atty before ever starting the application.

Luvabun, It will be well worth $200 an hour to sit down and talk this over with the attorney who established the Trust. If you allow mom to take the reckless course of giving things away, she won't be going to a nursing home, she will be living with you.