My parents are selling their home. They have already moved into an independent living community. Dad will be eligible for VA benefits when his net worth gets down to a certain amount, which at this rate of spending will not be too long. The question is what to do with the proceeds from the sale of the current house? If he puts them in his account he will not be eligible for VA benefits. Is there a way for me to set up an account under my name that he can use that won't show as part of his net worth?
Thankfully there is a lookback period on assets of those applying for care. If the home was in his name (and your moms name) then those assets will count towards his net worth. If he sold and gifted property in the last five years, it will all have to be repaid back to him...so if you put those proceeds in your name, the government will find it and you will be forced to pay it back...or to take care of him yourself until the 5 year period passes.
Angel
There are quite a few posters around here who know a lot about this stuff, Hopefully, they will respond. Still, I'd get legal advice.
When we've applied for VA benefits, there was never any lookback comparable to Medicaid. Assets were based on the prior year's income and asset holdings.
If so, there are things they can do now to be able to protect their assets from the proceeds from the sale of the home to benefit the longer living spouse. A good elder law atty (I'd get one that is NAELA certified) will have FA that they work with and understand the nuances of elder financial issues especially if Medicaid is needed later on. I'm not an FA but have had friends who face the situation you are in.....there is $$$ so how to structure it to best advantage??.....often for a healthy or younger spouse a SPIA is done with any excess $ over the community spouse Medicaid asset limit (which I think is around 117k) placed in the SPIA. Single premium immediate annuity and it needs to be one that is written to be medicaid compliant - this is the sticky as most annuities are NOT Medicaid compliant and there are just a few underwriters on this type of insurance product. Now personally I hate, hate, hate annuities but for a healthy & possibly younger spouse who has ill spouse really at need for very expensive care which could be paid by Medicaid if they had less $, a SPIA is a godsend. If they live long enough, they will outlive the SPIA $; if they die earlier, whatever is left in the SPIA becomes an asset of the state (this is what primarily makes it Medicaid compliant).
Placing any of house $$$ into your name is a bad idea. Doing this is a breach of your fiduciary duty as dpoa. Your folks may never need medicaid, but imho you should always plan that if either of them live long enough they will eventually run out of $ and need medicaid. As you are finding out the costs of care are staggering. There could be other creative besides a SPIA that your NAELA atty suggests. Like a personal services contract between you & your parents.....like you get paid (all above board with taxes) to oversee their finances or some caregiving (this could be sticky as they are in IL so in theory "independent"). Really you are fortunate to be able to do this and be able to plan things out with your folks able to pay for legal, FA's etc. good luck and let us know what suggestions are given. We all learn from each other.