MIL Savings and Medicaid
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Anonymous
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My MIL will be moving in with us in September. She has been living in the area but cannot afford an apartment and we have been supplementing her with $500 a month. We bought a house with an in-law suite so that she can live with us. Her only retirement savings are around $30,000 - but this was before the market turned this week, need to check in, not sure where it stands. I know at least 1/3 of those savings were in a single stock option, and to this point have minded my business, giving suggestions but not taking action to support.
We plan on charging her $500 a month for rent, which is below market for what we could get if it. She can afford this on her social security which is all she has for monthly payments. As we know that we may not be able to care long term and there is a potential of a nursing home in the future we are trying to protect some of her assets. We have thought about pre-paying for her funeral so this cost is not ours to bear. We want to sit down and discuss options. I have thought about charging her fair market value for her rent, and putting the surplus above $500 in an account in my husband and my name which we can use to support her if/when needed. Are there others ways we could legally buy down her savings so she could qualify for Medicaid? We are not trying to cheat the system. My husband and I are not high earners per DCUM standards and we are just attempting to be as fiscally responsible as possible. We can't afford an eldercare attorney but are more than willing to do the research if people have good places for me to look. |
Anonymous
| I had a relative in a similar situation. The funeral had been paid for years before so that wasn’t an issue. He was admitted to a nursing home that took Medicaid patients but he had to have enough assets to pay for a certain number of months of care in case Medicaid didn’t approve him. It was over $30,000 but this was in another state and it was a fairly nice facility. When he moved in, he had to sign over his savings and his social security to the nursing home as his social security paid and then Medicaid paid the balance. I was not involved in the intimate details of when Medicaid approved and he passed away about 7 months after moving in and I was not in charge of sorting out the final bills. I do not know what the rules are in your state and it may vary by facility whether you need to deposit thousands of dollars upon entry (if you haven’t already qualified for Medicaid). You will also be surprised at how much a funeral costs. There will not be much left (if any) if you don’t already have the cemetery plot. It may be worth a few hundred dollars for a consultation with an elder care attorney to make sure you are handling everything properly and applying for everything your MIL is entitled to. |
Anonymous
| is the in-law suite a legal rental? You talk about market rate, but if it's not a legal rental that matters, I'm pretty sure. And if you rent it for significantly less than market rate, I think that could create tax problems. I honestly don't really know of what I speak, but you need to ask your tax advisor how your plan will impact you and your husband. |
Anonymous
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OP - Your MIL's retirement assets are very limited and the likelihood that being able to pay for a few months of assisted living or memory care would have a difference in finding a private placement is doubtful (meaning one that one might prefer to be in.) What is important is that MIL have Medicare and a Medicare supplement to cover health care costs. You might look at the rents for a room in your area to base a higher rent off of and also factor in dividing up costs of food if she will be eating regularly with you. Then what you do with "income" is really your money to be spent or saved as you choose. You and DH might be wise to save all you can to meet perhaps other health care expenses which Medicare does not cover, but when may be needed such as hearing aides or eye glasses. Or another factor would be that with limited funds as she ages, you would have a buffer if she needed to be going to a senior day activity program so you could work. It has been mentioned here in a thread once about PACE day programs which are for Medicaid eligible individuals and provide day programming with wraparound and covered health and therapy services. I think even transportation is a part of the program. Find out what one needs to qualify for that as an interim measure. Or look into other senior day programs in your area and the cost to see how you can help MIL to protect her limited financial assets to be used for her benefit in retirement. |
Anonymous
| Have her pay more in rent and put it away. Then you can private pay a month or two while the Medicaid is pending and much easier to get in a nursing home. In md, she can only have a few thousand in savings. You can prepay funeral and other expenses. |
Anonymous
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OP, please speak with someone who is versed in estate planning, especially in view of Medicaid. What is being proposed here sounds sensible, but a Medicaid administrator may see it is an illegal divestment of assets. If that is the case, then your mom would be compelled to recoup those funds then divest of them in a way that they deem legal. It's not worth messing up, especially if your mom were to suddenly need nursing home care.
GL to your mom and to your and your family. |
Anonymous
I second this about the risk of Medicaid seeing it as a violation of the look back period. Several hundred dollars for 1-2 hours of a good eldercare attorney’s time, specific to your state’s rules, may save you thousands of dollars later. It should be fine to prepay the (surprisingly hefty) funeral expenses, but I can only speak for Maryland. |
Anonymous
Funeral prepay is allowed BUT you want to make sure the expenditures you opt for are within the state guidelines. Make sure the eldercare attorney is good. Ask them for the types of cases they've had where they've been successful. |
Anonymous
Don't waste your money on an attorney given how little there is. There is zero need for it. Just call the office and talk to them. I did it completely without an attorney. |
Anonymous
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It is $30,000 in savings you are talking about? This simply isn't a significant "estate" you need to worry about protecting.
https://www.medicaidplanningassistance.org/question/paying-rent-to-in-laws-violate-medicaid-look-back/ You are allowed to collect rent from your mother in law. Just have a rental agreement and charge a realistic amount for your area. Gather proof of what similar rentals in your area are going for so you can document it, and to be safe just charge on the lower side of market rate. (You could even advertise it for a month or so as proof that you had people interested at that amount.) I would have your MIL spend down her savings gradually by assisting in paying for family groceries, necessary household items, and household repairs if she is eating with you, using items in the home, and using the appliances. Have her pay for the gas for errands she needs to have run. She can also use her savings to buy a car that she will drive if she still drives and that the family can also use if need be. |
Anonymous
So just save the money she pays you for rent in a separate account, and if need be you can cough it back up to them. |
Anonymous
| I would talk to an attorney who specializes in this but at a minimum I would charge her market rate rent. |
Anonymous
What “office” to you mean when you say “call the office”? |
Anonymous
The long term care medicaid office. That's how I did it. I went in and met with a worker for a few minutes. Then, found a nursing home bed, which took months, then applied and was approved (only issue was I could not account for some of the money but I had proof who took it so they waive that). |
Anonymous
| The other option is there is low income assisted living. |