Spouse goes to SNF. Resources left by Mom: house about $240K, $150K mutual funds, a mix of CD/IRA worth about $25KK. All heirs live in different states. A Trust was formed by parents about 10 years ago. Some assets are in process of distribution in 2015. The house will remain a rental so rental proceeds must be allocated between the 3 heirs. Both personal and estate income taxes were filed for Mom in 2014. We may need to do a 2015 tax return for the trust. The heir who's spouse may go to the SNF is also executor of the estate. We are all concerned Medicaid will have loopholes that stretch beyond the immediate resources of the affected couple. There was no time to "plan" as one died and the other became too injured within a few months and may not be able to return home, triggering the Medicaid process.
If you and aunt have jointly owned funds, at least half will likely be counted for Medicaid eligibility. Original and sole owner/s of the Mutual fund? If it's both of you it may be half hers/yours? Has it been sitting/growing or were there contributions made throughout the years and by whom? "Name on the check" rule - does that apply in your case? Medicaid eligibility information obtained listed assets that "might" or "must" be spent down. I was told much has to do with how easily and quickly a resource can be cashed out and spent. I wouldn't do anything with the funds while she's trying to become Medicaid eligible. I would be concerned that Medicaid would consider her to be "moving" money and that would count negatively for her.
Income from annuities and other investments that come to her directly are the property of the Community Spouse in the State we live in.
Example......
Couple where he is 87 and has Dementia. She is 55 and is still working and living in the home.
He needs round the clock care so she sees an attorney who sets all the
450,000$ in liquid assets into an annuity that pays her 6,000 a month. He lives on 2,000 a month and gets approved for Medicaid.
I have no idea if that was her money or his money or joint money. But its hers now.
Good Luck
1/2 of the fund or if the entire fund is subject to Estate Recovery.
Good Luck
However, see an attorney.
Pre- planning saves money and headaches.
----"Some money needs to be saved to take care of the rental house"----Medicaid doesn't care one iota that the heirs may want to rent out the house, it views it as an asset; if your mom's name is on it (again it varies from state to state about the Trust) then it might be a countable asset.
----"it seems this heir's spouse may be penalized"----Medicaid doesn't care one iota about the family split or anybody feeling that someone is "penalized" they just want the MERP to move along and get the state's money back.
----"The well spouse's money will hopefully be viewed as seperate ownership"---if the well spouse receives $50,000 that will be counted as part of their approx. $114,000 Community Spouse asset allowance. And if Executor wants to try and "preserve" the 1/3 inheritance, somehow, and Medicaid caught a whiff of what was happening.....again here you need the advice of an attorney; perhaps someone else of the 3 kids is going to need Medicaid? You can't keep going down the road of "we wanna inherit" eventually, any assets anybody has, PLUS anything they might inherit, are to be used for their care.
----Conclusion-----you need to seek expert advice from an attorney who knows your state's Medicaid inside out & backwards. Don't be so anxious about your situation, there are many many millions of people who have NOTHING. Be happy that your family apparently has something, and USE some of your assets to figure out this complex situation and if possible, "protect" it. Quit thinking that someone is getting "punished", be pro-active, and "PROTECT" it. Put your energy into a good solution---with a good attorney (not just ANY attorney, make sure they know Medicaid in your state....not all do!).
And for ladylee1115, I did not say it clearly....there was a big spend down of almost all assets to get my Dad qualified. Mom left with house and 1 car and the limit of $114.000 in assets, however, not that much left... she is now home with private caregivers, so her remaining cash will only last about 5 months now with her at home. We have an RV to sell and then the house or car. So no, she's not likely to have her assets last the rest of her life. She will be looking at AL real soon, and she's refusing to consider that. She wants to die in her home. But with caregivers getting about $3000/mo and being down to less than $10000 in cash IF we cash in the IRA and Annuity.... it's all going to go fast. I was not suggesting that I should get an inheritance while gov't paid for their care....just lamenting the fact that in the beginning, I had the option of 'taking a salary' for all that I do, and I said, " Well why should I do that to my parents' never figuring on what a mess it would be, how much time it would take and how my home business would be destroyed in the 3 years since I took this on.... while all the inheritance that my parents planned to leave me, would be used up and when it's done, hubby and I will have nothing but social security for the rest of our lives, if our business has lost so much it's not able to be sold to anyone. Just lamenting how life turns out and how easy it is to be screwed no matter that you try to do the right thing! I am having a really bad time right now is all. I'll likely be better tomorrow.
Perhaps Mom won't ever need Medicaid and she will be able to meet her care needs with the money she has left plus the Life Insurance from your Dad.
The Purpose of Medicaid is to care for people who have no resources to care for themselves, not to preserve family money to pass it on to the next generation.
For an individual NH medicaid, it's 2k in non exempt assets and about 2k in monthly income (exact amt depends on your state as each state administers its program uniquely). They have to be "at need" financially which means impoverished. For couples, the NH spouse needs to be impoverished BUT the community spouse is allowed up to 114K in assets and their assets are fixed ( often called the snapshot day) on where they were financially on the date of the application. If the CS is realistically right behind the NH spouse in needing that level of care themselves, they are just going to have to spend down to get to the 3K asset allowed for couples.
No matter how you look at the math, your elders have $. They are not impoverished and will need to spend down to qualify.
Yours have significant assets and assets that are easily findable as their names & SS # are tied to assets. 150K mutual funds alone.....they are not impoverished. State expects them to use their $ to pay for care first & foremost. By applying to Medicaid, they sign off on state getting an all-access pass to IRS, tax assessor, banking, investments, retirement sources,etc. An all access pass & nobody gets a tour T-shirt, or a lanyard to get into the after concert backstage party.
Are you saying that the home is rented and that the rent is being given to the 3 kids (& future heirs)? If the property owners are on Medicaid, what happens with the rental income are under Medicaid rules. There is a poster on this site who has their moms house rented - hopefully she can provide insight on this.
Also house will be subject to " intent to file a claim or lien" process by MERP after the last one dies. Try to clearly speak with attorney as to how MERP is done for your parents state and what state requires for non resident executors.