Our attorney told me to spend all of my dad's bonds and life insurance money on our house. Does anyone know what things we cannot buy?

This doesn't sound like good advice to me, is this an elder law lawyer who is well versed in medicaid?

Doesn't make sense to me either, unless there was some misunderstanding.   If you mean that your father waited too long to donate funds to you and your sister, I would understand that conclusion.  

But I don't understand any recommendation to cash the bonds, repair the house, or purchase items.   I would think those funds would be more well spent in an investment, even just a bank account, for your father's future use.

Hopie has another post where she shares that her dad is needing a SNF.
As I understand it, Homes are Medicaid exempt. Money spent on the home would be a quick and allowable way to spend down dads savings.

If there are actual repairs that need to be done, then do them. If there still a Mortgage that needs to be paid off then do it. But I wouldn't spend it on just things to buy things.

What I suggest is make a list of the bonds. You will need a column for the date of issued, the number of the bond, and the face value.
Take the list to the bank and they should be able to tell you how much interest the bonds have earned. If over 30 yrs old, they do not collect interest anymore. This will give you an idea of how much the bonds are actually worth. Remember, that the interest from the bonds will need to be claimed on Dads income taxes, we cashed in 30year+ bonds in and paid 13k in taxes that year. These bonds were from the 80s up. We kept out 15k before we invested the rest. Call the bank and see if they perfer you list the bonds or bring them in and let them do it.

So you have 50k in bonds. Face value is $100 lets say, your Dad paid $50 for that bond and upon maturity its worth $100. So if these bonds are 20 yrs old Dad has earned at least 25k in interest. Dad pays taxes on that 25k. If he has had them over the 20 years then he continues to earn interest up to 30 yrs. If these bonds have not reached maturity, they are not worth 50k. The earlier bonds were mature at 10 yrs but that is when interest rates were high. They are much much lower now so it takes longer to mature.

The insurance policy. Does it have cash value? If not, can't cash it in. If its an employer policy, doesn't need to be cashed in. Only if Dad purchased the policy himself does it need to be cashed in and it has cash in value. When you do that, you can prepay his funeral with that money and any money from the bonds. The insurance co can tell you what the cash in value is. My Mom had a Prudental policy that paid dividends. Her 2k policy had an additional 8k on it,

Medicaid does not care about what is in the house unless its antiques and expensive paintings and jewelry.

What I suggest first find out what those bonds are actually worth. I want to say though, that you will get Dad into LTC quicker and easier if you pay a few months privately and then apply for Medicaid.

I applied for Medicaid in April when my Mom had 20k left. I placed her May 1st and she paid May and Junes bill. I called the Medicaid caseworker in June to confirm I had completed everything needed and she was spent down and July 1st Medicaid started paying. My State only gives 90days from date of application to complete what is needed which is spending down assets, providing info needed and placing the applicant.

Who owns the house? You cannot use dad's funds for improvements to your house. That would be considered gifting and subject to Medicaid penalty.

Goodness, at 70 your Dad's very young for this (and so are you!).

It says on your profile that he recently suffered from sepsis - are you sure there's no prospect of recovery?

Hopie, is this lawyer certified in Eldercare law?

It seems to me like the best use of dad's money right now is to get him placement in a good nursing home (if that is the level of care he needs).

You have a job and presumably can afford housing for yourself. Sell dad's home, use the money for his care and get yourself an apartment.

Hopie, can you please provide more detail as to why he needs NH care? You don't indicate he has cognitive issues, and most people at his age can recover from sepsis unless he now has profound and lasting physical damage from it.

If he is mentally competent and can carry out his ADLs, he probably wouldn't be assessed for AL. In some states Medicaid doesn't cover all or any of it, so please make sure this is what he needs. I would start with helping him get a very comprehensive medical and cognitive assessment.

If he does need NH placement soon, I would choose a nice one that accepts Medicaid and has the full spectrum of care on its campus (IL, AL, MC, LTC) and have him enter as private pay. Once he's 3 months away from running out of money then he can apply for Medicaid and he gets to stay in that NH, and hopefully they have available Medicaid beds. FYI in most cases once he qualifies they will move him into a shared room.

I read your profile and you are scrambling and overwhelmed but providing more details will help us to help you in a more fruitful way. Blessings!

You can't just spend your dads money. It is his until he dies and he gets to decide how it is used until he is declared incompetent and then it is to be used for his care.

If you listen to this attorney you could be facing some legal issues and jeopardizing your dads future ability to get assistance.

If he is this young and already needs a NH, which it doesn't sound like he does, any hopes of an inheritance are gone. So wrap your mind around that and get your dad the best care he can afford.

https://www.payingforseniorcare.com/missouri/medicaid-waivers/supplemental-nursing-care

This is from a site called Payingforseniorcare.

Apparently Missouri has a Medicaid waiver program that will assist with payment for assisted living.

Has your dad had a "needs assessment" either by the rehab place he was in or from yoir local Area Agency on Aging? That will tell you what level of care he needs.

First of all, Medicaid does not consider the interior contents of a home when they're doing the 5-year look back period for someone applying for it. They also don't have one rule for real estate and bank accounts either. If your father is married, Medicaid will only look for the value of half the value of a house, bank accounts, or other assets. Medicaid allows a spouse to stay in the house, own a car, and leaves them enough income to live on. They're not unreasonable. The people who will get unreasonable is a nursing home or AL. They want everything a person has up front and will threaten a family about what Medicaid will do if everything isn't liquidated and handed over at once.
Listen to your father's lawyer. An elder law attorney is going to know what he's talking about. If he says spend the money on the house, then spend the money on your house. Do everything. Go buy new furniture too.
The elder lawyer I talked to about my father told me to do the same thing.
Your father should transfer all of his assets including his property into an Irrevocable Trust to you. The lawyer will be able to do this. Your father will have to be cared for at home for five years. If he can avoid permanent placement in a nursing home for the next five years, you'll have nothing to worry about when it comes to money or assets.

Hopie, yes, an analysis of what he can and can't do for himself would be a needs assessment.

Before he was discharged from the rehab, did you talk to a social worker or nurse on staff there who suggested what a good setting would be for him? Or what services he would need if he went home?

Did they set up a home health care agency to come out to provide nursing and therapies (OT/PT) for him?

Hopie, one thing that I discovered when doing end of life planning, many attorney's now claim to be elder law attorneys and they ARE NOT.

I was given much incorrect information and I found out before I was stuck with consequences of an ignorant attorney just wanting a piece of the pie. Because I promise you that they will say you misunderstood them when push comes to shove.

Your dad has already been assessed, this will come out. As will selling his assets and using them to do property improvement and interior decorations.

Medicaid will question this and most likely impose a penalty period for coverage.

Tell dad whatever you need to for him to believe that he is leaving an inheritance. Then find a facility that you can honestly feel good about placing him and self pay until he has done the spend down.

You really don't want to get this wrong and be on the hook for care or for payment to a facility.

It is worth a free consultation with a certified elder law attorney to get it right. (www.nelf.org)

Because you have lived in the home, nobody is going to make you sell it.

Spending money on home improvement just as he needs to go into care is the problem. You are his POA and can not have personal gain. Home improvement to the home you will be living in, is personal gain.

Again please find a certified elder law attorney, to many attorneys think they know and this yahoo is putting you in a precarious situation with his suggestions.

Stopstopstopstopstop - !

Hopie. Your Dad is 70. The issues you list include incontinence and mobility problems and "age related decline," and we also appreciate that he's recovering from sepsis (which really does knock the stuffing out of a person, poor chap).

But all the same how come you are dealing with this? You mention no mental health or dementia-related issues at all, your Dad is a spring chicken by comparison, these decisions are actually his to make and not yours - what is HE doing about his care?

When I was planning my mom's future the local hot shot CPA gave me all kinds of advice that walked the thin edge of legality, chances are high that if I had taken that advice we would have been fine but if we had ever faced scrutiny the possible consequences of having a judgment against us were more than I was comfortable with - the top 1% get richer because they have lawyers and accountants who know how to work the system and the poor schmoes end up paying.
If I were you I'd get that second opinion; I'm curious how the new, improved house would not end up with a medicaid lien against it making all the asset protection just smoke and mirrors.

I’m guessing atty is advising using all Dads $ in those bonds and cash value from his while life insurance policy on his house because:
- dads home, as it’s his alone and in his name, remains an exempt asset for Dads lifetime under his states LTC Medicaid
- the daughter, Hopi the OP, lives there & it is her only home. She wants to continue living there and inherit the home as per dads wishes
- under Medicaid rules, dad is supposed to only be able to spend $ on things for himself and any asset he owns. He owns the house so he can spend $ all his money on it, leaving him impoverished w 2k in non exempt assets for LTC Medicaid.

Personally I do NOT think it is a best use of his funds. Why?…..
- dad is very young, he’s like 70, so the likihood is that he’s going to be around another decade.
And
-Medicaid does not pay for all health related costs.
Dental is almost always excluded from any payments from Medicaid or Medicare. MediCARE may pay for total extractions & dentures, but, modern dental practice has it that those really aren’t done anymore. I’d have him see his dentist and figure out just what work needs to be done and see whatever specialists as well and start getting the work done ASAP. Dental could easily use up all the bond money. My mom did a significant spend on dental the years before going into a NH. Got rid of all those old bridges, fillings and got post and bridge work done. On retrospect it was one of the best things done as she was able to eat anything (ribs!). Even w the lax dental hygiene done at a NH, (yeah I’m looking at you, red sponge swab) her teeth & gums stayed good. You go to have meal at a NH and look around and most there cannot really eat properly bc they have bad teeth, gum disease and their dementia is too far gone to get dental work done plus there’s no $ to pay 2-3k for a root canal and crown. Dental is a good way to spend down
- I’d also look at buying his more better quality durable medical equipment. DME paid by Medicare tend to be as cheap as possible. If dad could benefit and be able to use a motorized wheelchair or speciality seating, get his MD to write a script for one and spenddown by buying him one.

That sinking his $ into new roof, new appliances, new whatevers at the house is quick & easy but all that does is benefit you as you are going to continue to live there and plan on staying till past dads death. If any of the spends, increase the assessor value on the home, that in my experience works against you when that eventuality of dealing with estate recovery enters your life. Some states MERP have it that lower value homes kinda fall off the radar for recovery as they are too low value to make it cost effective for recovery. Lots of places have permits issued for any kind of work or hookup so new water heater / new roof has a filing w the city. It increases value.

I’d clearly ask this atty what his experience is in dealing with MERP. You don’t qualify for the caregiver exemption as you have had a FT job. So exactly what does this atty envision as how you are going to get past MERP? Your dad is kinda young, so If dad lives several years, Medicaid tally will be mid 6 figures. Easily 500-800K, possibly more. I just don’t see the State or it’s outside contractor ignoring recovery that big if there is a nice all fixed up home as an asset to place a lien or a claim against.

Did you ask if the State is going to want you to be paying dad FMV rent as you are living in his home? If not you need to find out. Rent plus his mo income may take him over income limits.

Personally I’d use $ to do some dental work & the rest to private pay in a NH that also has Medicaid beds. They he segueways from p.p. 2 LTC Medicaid. You’ll likely get him into a better facility this way.

Again spend it on things that would benefit his care and clearly find out what estate recovery runs like in your state.

Concerning the house. If Dad goes to a NH with Medicaid paying for his care, his SS and any pension will need to be used to help offset his care. So, you will not be allowed to use his money to help with the house. Dads house is an exempt asset while he lives but not after he passes. Its then an asset that Medicaid can recover what they paid out for his care.

How does that effect you. First, its your residence, Second, you were his Caregiver. But you may need to prove to Medicaid that you can afford utilities, taxes and upkeep to be able to remain in the home. When Dad passes, you will get a letter of recovery. You may then again have to prove you can pay the bills to stay in the house. If that is OKd, a lean will be put on the house that will need to be satisfied if you leave, sell the house or die.

Please, if you need further info, keep posting to this thread. It gets very confusing when there are multiple threads from the same person.

Hopi, find out exactly & in writing from Medicaid legal division if someone w a FT job can get the caregiver exemption in your State.
I know definitely for 2 states that the caregiver exemption requires them not to have had a FT job AND they must provide documentation from either the physician or SW of the now deceased but was on LTC Medicaid elder as to the care needed for the elder with some sort of notation as to what the care was or the ICD-10 codes for their diagnosis for the period of time prior to entering a NH. This part is tricky bc it’s asking for documentation from the time before they entered the NH. If dad lives another 4 years, that means you’d have to get in touch with MD or SW from 4 years ago. The NH MD or SW cannot do the form.

There actually is a section in the NOI / Notice of Intent (to file a lien or claim against the estate) on this for anyone attempting caregiver exemption . Ask that atty to see a current NOI that your states MERP or it’s outside contractor for MERP does. If he’s experienced in this, he should have a sample of all the MERP documents that go out. There’s a set group of paperwork that happens. It’s not anything super secret either. But it is very much state specific as your states Medicaid administrative code and your states property laws and probate laws enter in on just how things can roll; and some states have turned all MERP over to the contractors while other only have the property & land stuff done by the contractors. Also some states do liens (& some do it from Day 1 of Medicaid) and others do it as claim. It’s different legal for how to deal with. The atty needs to explain this to you and in detail. None of us on this forum can do legal advice. But we can share our pitfalls and successes.

Ask atty the worst case scenario too. Good luck.

Hopi, ok so you’ve posted a couple of follow ups with more info…..

so apparently your dad has given your Sister over $ 100,000.00 in either $ or buying her vehicles. Is this right?? OMG! Doing this is considered “gifting” by Medicaid and not allowed and usually the disallowed is dealt with by placing a penalty on his eligibility for LTC Medicaid based on the $ amount of the gift divided by your states Medicaid daily room&board reimbursement rate. And the penalty starts the date of the filing of the application, even if the penalty isn’t found out till 3.5 mo into the processing of his application. So Medicaid won’t pay for his stay till the penalty period is done. But that NH will go after dad or whomever they can to get the bill paid.

So when did all this funds from Dad to Sissy happen? and did you tell the atty this info?. Medicaid is going to want usually 5 years of all your dads finances. Like 5 years of bank statements, perhaps 5 years of all tax filings, his current awards letters from SSA and any other income resources. IMO $100 large is a huge sum of $, it’s gonna be found out and be an issue UNLESS all $ he gifted to Sissy (or you or anyone) was done prior to Summer 2016. Summer 2016 will take the $ beyond the 5 yr lookback.

You also posted that you have a 15 yr old. So you & your son live at dads? So your a mom of a teen as well as have a FT job? Hopefully I’m wrong, but I just cannot see the State buying into you being a caregiver for your dad to the point of getting the Medicaid caregiver exemption. If Missouri MERP does a total exemption for a heir who lives in the home prior to the homeowner going into a NH and onto LTC Medicaid, then yeah you might could get that exemption. You need to find out exactly what the state requires and allows for exemption to estate recovery and IN WRITING.

is this atty CELA? If not, I’d take your questions and concerns and meet w another atty that is CELA. And when you go to see either atty, record the conversation if MO is a 1 way state or take a friend to take notes for you if it’s not.

On hearing that others go the route of “paying off a mortgage”. Often it done for couples where 1 needs a NH and the other doesn’t. The rules on exempt assets for marrieds are way way different. Like the nonNH spouse (it’s called community spouse / CS in Medicaid speak) usually can retain 128k in thier own solo assets in addition to the standard home & 1 car. If they as a couple have over 128 large in assets, all that extra $ would need to be spent down first (for the ill one to be eligible). Using the $ to pay off the mortgage can be a good thing as the CS wouldn’t have to fret abt dealing w a mortgage. For an individual, using savings or cashing in investments and whole life policies to pay off the mortgage, allows you to completely own the home and sell it and keep the $ from the Act of Sale to private pay for care. If you start to default on the mortgage cause your now in a NH and have no $ anymore to pay the mortgage, due to Medicaid requirement of a copay of thier income, that mortgage co will do a foreclosure in a hot minute. If you let them foreclose, you kinda loose all the equity you built up paying that mortgage for years. Foreclosure process is pretty ruthless.

Medicaid does not care at all about the applicants debts.
Medicaid is all about assets & income and that assets were not gifted prior to application and that income now is used to do their copay.
If you have a mortgage, credit card debts, utility bills, that’s not Medicaids concern. If you default on debts, not medicaids problem.

Your dad doesn’t have a mortgage, a HELOC or other securitized lending on the house, right?

I think there is a five year look back. You may want to get a second opinion...from another estate planner.

Your attorney’s advice makes sense to me. I would say to read all the varying opinions here, especially from people who are actually knowledgable and not making assumptions which may not be the case with you and your dad. It does seem that you need to have further conversations with the attorney, and you probably now have more to ask about than before, seeing some issues which may arise.
I’m sorry you have to go through this. Sounds like you have given so much, and I hope life becomes easier once things are settled. Your dad has been lucky to have you.
My family’s experience is that the Medicaid application process can be long and frustrating, with the state processors losing documents, or documents not being routed to whomever needs them. Employees’ competence cannot be assumed, and states are very different in their income guidelines.
Best of luck!

You can spend on anything needed in the house. A new bed, sofa ( for his comfort). Remodel bath or kitchen. We are going they this right now. Yes there’s a 5 year look back to make sure you did not give money away. You could even buy a car if yours is old or in dis repair because you will need transportation and as the spouse you get to keep the house, a car and enough money to live your life

I'd suggest having a consult with a different elder law attorney - maybe in a nearby city - on the Medicaid application process. Anyone can say that they specialize in elder law, estate planning, etc. Look for someone who has certification in the field.
Your local Agency on Aging may be able to suggest some attorneys that other clients have been pleased with.
You need more info on the Medicaid application in your state. You can find the application on line and take a look, it does detail the documentation you need to support your claims. For example, what is needed to verify that you have been his caregiver and kept him out of a nursing home so far? (Given his steady decline and frailty before he developed sepsis, his expected longevity is much less than other commenters might realize.)
Using his funds to private pay for a nursing home usually gets you a bed at a nicer nursing home - yes, they do charge much more than Medicaid pays, but you usually get more, too. No home is perfect. Rating system is easily gamed.
If he can pay for several months before he runs out of money and goes to Medicaid, that is usually considered 'a good admit' by a facility.
Anytime you submit information to the state, make 2 copies of everything. Set aside one as your master. Use the second one to replace documents that seem to disappear on arrival at the state office.
You can send the whole application by a mailing source that requires someone to sign for the package - then you know when the application was received.
Medicaid is a frustrating system, and the employees generally are doing their best.

Save your money and set up an appointment with a Medicaid case worker. They will ensure you have the correct info and you won’t have to pay for it because it is their job. Do your research and start gathering all the documents and critical info now because it can take several months to get approval. The nursing home staff may be a good resource to help you too.

You may be better served in placing your father in a good facility and using his money to pay the fees until he spends down enough to qualify for Medicaid rather than going on a spending spree for a house he won’t be living in.

That $6500 the attorney wants would pay for a month's worth of fees! Make sure the facility will accept Medicaid waivers and be aware that he may be moved to a smaller room or have to share.

Do improvements that are needed on the home if you were going to sell it. Start with usual home appliances: hot water heater, air conditioner, furnace, whole house water softener if the water quality is a problem. Then, move onto house integrity: the roof, windows, door, locks, home security system. Lastly, consider aesthetics: new flooring or carpeting, outside paint, indoor paint, upgrades to bathrooms or kitchen, window treatments, upgrading the landscaping... The aesthetics may require being careful about,, but the other upgrades should not be a problem.

It’s called a look back clause.

This concerns me.....If you spend the money (his) fixing your home, what will happen if he needs Medicaid? Something doesn't hit me in the right way. Something is not clear or being understood. This is very serious - go back and get this clarified and get more accurate information - don't wait.