GAO194925 Asked July 2011
If I have a joint bank account with my mother can I move her funds to a new account in my name in case she moves into a nursing home?
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I have allready completed a quik-deed on her house, but don't want to lose her life saving to a nursing home, she is still living in her house, but has Alzheimer's.
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Isn't mom's Social Security going to the nursing home? I would be very surprised if it is not. All of mom's income is supposed to go towards her "patient responsibility" which is determined by the Medicaid agency and is usually all of her income less a small amount for "personal needs".
As far as your sister is concerned going to the police is all you can do besides making sure she had no access to the checkbook in the future!
2. How bonds work (or "held" and therefore how they can be redeemed).
I was executrix for an aunt who loved doing E bonds both as a way of saving $ & as gifts - you name the occasion (graduation, wedding, birthday) she gave them and did it as co-owner and a few as POD (pay on death). When she died, bonds where still being held by the persons she gave them to. Why they still held them was varied: some had not matured (usually 30 years), some being held for college & some because they didn't know wtf what to do with them. Bonds showed her & them as co-owners. In how bonds work is that you DO NOT need both owners signature to redeem bonds, you just need 1 of the persons listed on the bond to redeem. So none of the bonds were included in her estate, they were the property of the co-owner, as you need only 1 person to claim ownership of the asset to redeem them. The co-owner claimed ownership.They were NOT my aunt's asset, this according to the probate judge. BUT the bonds issued POD (not as co-owners) would be part of her estate but not subject to probate because they were POD (like a bank account POD). If bonds are POD, you need a certified death certificate to redeem or re-register them. How the bonds were done & how they are held likely will make a big difference as to whether it's an asset for her (and for Medicaid review) OR they were a gift and before the 5 year look back AND what the intention was for the bonds. You should talk with an elder care attorney to see what the viewpoint is on bonds are for your area in dealing with Medicaid and probate later on.
Tax wise bonds, I don't think, exist until redeemed or re-registered so I bet they really aren't going to show up on Medicaid financial radar. I was dealing with old school style paper bonds (before the electronic ones they do now) so that might have changed.
You need to look at the bonds to see maturity date. Redeeming them before then (could be 10, 20, 30 years) could cost.
One last thing, banks aren't selling bonds anymore. My late aunt would be just heartbroken about this! So most banks will not redeem them at all & you have to go to the Treasury Dept on-line to do this. Good luck & let us know what's what.
I'm not sure what you mean my co-mingling of funds Ralph? I too have a joint account with my mother. It doesn't have much money in it and I just use it to pay her bills since her hand writing is shaky. Should I be keeping track of what is spent?
Thank you for posting.
The simple rule when it comes to planning for Medicaid benefits is:
NO GIFTING.
The quick claim deed represents an uncompensated transfer and therefore, a gift.
As stated above, if you now apply for benefits, or do so within 5 years, a penalty based on the value of the transfer will be imposed.
So, with respect to mom's bank accounts, DO NOT transfer them to an account in your name only.
When and if you are ready to apply for benefits there are tools and techniques that can be implemented to preserve her assets for her benefit while she is receiving public benefits (note I said benefit the elder, not the adult child...I'm not implying anything here, just stating a point of fact because many, as I do, object to planning that simply let's the kids abscond with cash while we all pay for mom's care).
These techniques are not subject to a 5 year look back and so do not have to implemented until you are contemplating benefit application.
Now here is some good news, the mistake you made with respect to the house can be cured by quite claiming the property back to her in her name only.
Understand that in almost all states the homestead property is not a countable asset when applying for Medicaid nursing home benefits as long as mom states an "intent to return" to the home.
If your plan is to keep mom home for the duration, then, too, the property will remain a non-countable asset.
All you will have to worry about, if she receives Medicaid home and community based services, is Medicaid Estate Recovery (the state can lay claim to the exempt home property at her demise).
Again, depending on the state you live in, there are options to avoid this as well.
Important: Are you sure you have a valid Durable Power of Attorney and Health Care Surrogate document in place?
P.S. Medicaid compliant immediate annuities are a bad deal for nursing home residents as all income goes to the facility. If care is being received at home or in an ALF they can, at times, be beneficial. This is rarely the case for an individual. Where there is a community spouse, this strategy can make more sense.
Like the others, I'm assuming your thinking that mom is going to need Medicaid to pay for her care in the future??
Each state has it's own Medicaid rules but in general the person has to have an income of under 2K a month, can own a car and a home if the value is under 500K - 750K (although the home is subject to a states Medicaid Estate Recovery Program) and LTC/SNF is medically necessary. If their over the 2K ceiling, they need to spend down, or do a Miller Trust or get a “Medicaid compliant” annuity (irrevocable, non-assignable, has equal payments, and names the state Medicaid program as the primary or contingent beneficiary to the extent of Medicaid benefits provided to the institutionalized individual). Basically get them to poverty level.
Your joint account is "commingling funds", this is sticky and can be a paperwork nightmare if she needs to go on Medicaid and you could find yourself having to document 5 years of paperwork and expenses in a very short period of time in order to have her approved and show what $$ is yours and what $$ is hers.
It seems to be that Medicaid rules does not allow money earned from work or Social Security to be “commingled” with anyone else’s money. The money of a person who is disabled cannot be commingled or deposited along with anyone else’s money if the person wants to maintain eligibility for Medicaid. This seems to mainly affect Special Needs Trust (that parents do for kids that are disabled). But with states all expecting shortfall's in revenue, they may start looking at the elderly's accounts too. You just can't be too careful when going through Medicaid application to having everything be within the requirements. Good luck.
Are you thinking in terms of having Mom qualify for Medicaid? There is a "look back" period where assets have to be accounted for. If she doesn't need care before that period is up that will be different than if she needs a long term care facility next year.
Seek the advice of an experienced professional. It will be worth the cost.