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Financial Preparation for Going into Nursing Home

My mother is going to be going to a nursing home in the next one to two weeks. My sister has been on all of my mother's accounts including CD's, house, bonds, checking, etc. since my father died eight years ago. As you know, nursing homes require you to show your financial value within a certain time frame. My mother and my sister live in the state of Michigan. My question is, can my sister take control of the funds and remove my mother's name off these accounts with the exception of the checking which her direct deposits filter in? She has had control of this money for years and I hate to have all of my parents hard earned money go to a nursing home. Unfortunately, my sister did not pre-plan any of this and should have put everything in a revocable trust when my dad died. There are several things she could do right now, write us each a check for $10k as a gift inheritance, pay herself for all the years she was the sole care-giver. What does the law say about such a matter?

Ever-changing rules can wreak havoc with finances! You and/or your sister should visit an attorney who is well-versed in elder law. The rules covering Medicaid coverage for nursing home care are extremely complex and vary from state to state. You need to know what the Michigan rules are. For example, you'll want to find out whether any disbursements to you and your sister can be "recaptured" in a Medicaid "look-back" process.

Begin by visiting a county Council or Commission on Aging. You are likely to find some information there, as well as a list of attorneys who are equipped to assist you.

Finally, if you are able to avail yourselves of the "gift" rules, the maximum gift amount without tax consequence to the donor has been increased to $12,000 per year per donee, according to IRS rules. Hopefully, you are able to protect some of your mother's assets after talking with the attorney. There may or may not be strategies you can use so close to your mother's move, but you will benefit from knowing what is permitted and what is not.

Published on 9/13/06