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The 5 year look back can be extremely thorough. I am told that in some states you have to go through the back checks for the full five years and you need to specifically list every check that was for more than $500 and state it's purpose. And, of course that would also include withdraws from savings accounts or other assets. So, unless it is beyond five years, you will get caught and your mother penalized for all the money that she "hid".
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So, the state can just confiscate the money until you can prove justification for the expenditure? A whole new avenue of Civil Forfeiture.
I wouldn’t do it. Really unethical. Some homes you have to self pay for a few years before they will accept Medicaid. You want her in a decent place.
Great point. If the OP does happen to pull this off he/she will have a better selection of, for lack of a better term, "upscale" nursing homes if you can self-pay for at least a year. My plans call for at least two years. So, maybe best not to go all the way with this. Some strategic decisions must be made.
As far as "really unethical". It's not if you do it according to Hoyle. i.e.:
Outlast the five year look-back window. It's their rules. Or....
They disburse the assets, only four years go by, Medicaid refuses to pay until you call back those funds and self-pay till exhausted... OR.... they pay now but when mother passes away they will come looking for it. That is not a crime. Those are the rules.
I suppose an addendum to "the bottom line" might be: Even if you transfer assets tell those people NOT to spend any of it for at least five years because mom might need it for the nursing home. All of which sort of defeats the purpose of transferring.
Used to be a person could “gift” like $10k a year to anyone and it didn’t count toward transfer of assets. You should check it out. Trust me, Medicaid is very thorough in their hunt for hidden or transfer if assets. It’s very serious business.
if my brother has close to little money and he inherits money thats a good thing no?
She does give him money now and it helps....not sure where you're going with that one
thats a fair point about "less than the best nursing home"
im ignorant in this area and i guess i dont fully understand how some nursing homes are better than others....every one ive been in sucked....thats my assumption...maybe im wrong....
Well you said your brother is destitute ,so I’m wondering if he is incapable of self care and managing money due to mental health issues then how could he manage an inheritance?
Why can she not put money in a trust for your brother now?
Well, people do it all the time. There are ads on the radio for lawyers who will set up a trust to hide the money and one of the radio commentators the other night was saying it's a good idea.
Maybe if we had affordable health care and nursing home care, people wouldn't have to impoverish themselves like this.
If you want to know what I have seen and think is wrong is people who hide their assets to get into subsidized elderly housing. This kind of housing (in the states I know of anyway) has long waiting lists and none is being built to replace the old falling apart 400 sq ft apartments. The people who have to live there certainly don't enjoy it, but they live there because they have to. Then there are these people who give their money, houses, etc. to their kids so they are poor and can get into housing. Usually it's a man who wants a bachelor pad. I knew a man who had an entire farm and a nice house, put it into his kids' names and took up a hard to get apartment in elderly housing. Knew another one who owned a business--did the same thing. It's a racket and they get away with it when they have a perfectly good place to live. So they keep most of their belongings at their real house and go there whenever they feel like it. But they also have their bachelor pad. In very old age, they usually end up back at their old home. Now THAT sort of thing is very wrong!
Yet another reason I'm in favor of the death penalty.
Well you said your brother is destitute ,so I’m wondering if he is incapable of self care and managing money due to mental health issues then how could he manage an inheritance?
Why can she not put money in a trust for your brother now?
I shouldn't have used the word destitute...he is extremely poor and just isn't all there mentally so sh has concerns...
thats a possibility too...the trust...thank you...
I wouldn't just speak with an attorney (who might be more than willing to sell you an expensive trust) but also to a CPA (to explain to you the tax consequences of transferring assets that the attorney might downplay) and also to a Medicaid planner (to explain to you how difficult it might be to qualify your Mom for Medicaid) and then also to a local geriatric consultant (to explain to you the differences between Medicaid beds and other options that might be preferable to your Mom if she actually needs care).
What you are proposing is far more difficult than 'moving money into the kids' accounts.' To begin with, your Mom is 81 and while she's currently in good health there's no guarantee her health won't decline sharply in the next 5 years. Who will take care of her or assume financial responsibility for an illness before she reaches age 86 (and presumably qualifies for Medicaid with assets now depleted)? What will happen if she doesn't for some reason qualify for Medicaid at that time due to a change in the rules or perhaps because her income is above a cut-off?
Does she own a home? The home would be sold after her death to repay Medicaid or is the idea to also transfer the title to the house? Do you have any idea of the tax consequences of these actions (think stepped-up basis)? How much doing this can cost you?
Are all the assets to be transferred to the brother, who is said to be improvident and mentally ill? Are you prepared to step in to personally care for your Mom when he squanders the money? How are you going to handle it if your Mom is dismayed when she's placed in a Medicaid bed and wants to come home only to no longer have a home to come back to - and no money to hire assistance in that home if she had it? This idea may sound better to her in theory than in practice. Do you really expect your brother to step up?
But maybe he should. That your Mom appears to still be coddling him speaks volumes. If your brother is disabled or can get himself to a doctor who certifies him as disabled and if he moves into the house to perhaps actually care for your Mom when needed then in your state he may be able to continue to live in the house indefinitely. This even if your Mom eventually does spend down her assets on her own care if she experiences a long-lived illness and then requires Medicaid. Sure, that's a form of 'work' that may not appeal to him.
It looks like your family needs to consult a responsible professional - one that can help your family plan for what could well be continued dysfunction on your brother's part and future ill health on your Mom's. There are provisions to address disabled adult children - like continued residence in a family home or special interest trusts or SSI/SSDI or Medicaid (for him).
The reason you're receiving so much pushback on this thread is that transferring assets to 'legally' qualify someone for a program for the needy is not 'tax management.' Medicaid funds are limited. There are long waiting lists for many services - for the disabled, for home care. Qualifying an individual as 'needy' when they are not (financially) is, in essence, taking the place of the person for whom the funds were intended.
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