Mom is going to an assisted living facility. She is selling her trailer. Going to keep that money in the bank and use as needed. When that is gone she’ll have to apply for Medicaid. Does she have to worry about what she spends it on? Can she take a trip or buy presents for grandchildren?
Gena / Touch Matters
There are threshold amounts that are different state to state and VERY different than Federal tax laws. For example, a person can gift upto $20k and not incur a gift tax. However, Mediciad considers that a non allowed gift and will penalize the patient if done within 60 months (in most states) of needing Medicaid LTC. This is not a DIY situation because it is very complex.
If your mother wants to go on vacation keep all receipts and any address on documentation will need to be her residence. Typically if cash withdrawl is under a certain amount per Mediciad rules it will not need receipts unless it is a consistant withdrawl. So if your mother withdrawls $500 monthly a reciept will need to be documented and submitted to Mediciad.
The assisted living facility will be an allowed expense and statements will need to be supported to Mediciad in the 60 month look back period.
However, she is generally allowed to spend the money on herself, such as for clothes, a pre-paid funeral plan or a modest trip, as long as she receives fair market value for what she spends.
While she can take a trip, it is best to keep receipts to prove she used the money for her own needs rather just giving it away.
Make sure you keep receipts.
If not and you are legally making decisions for her then that is different then her choosing to buy a car for a grandchild.
If there is a possibility that she will have to apply for Medicaid in the next 5 or 6 years I would make no gifts to anyone.
There are a few others that will give you much more information.
Just be careful with any money that is spent.
And I would make sure the place she is moving to will accept Medicaid, not all do.