Protecting My Mothers Assets

Q: My Mom is fast approaching Medicaid time.

She owns a 300 thousand dollar house, property valued at around 60,00 dollars, timeshare valued at around 21 thousand, has 40 thousand dollars in her 401k. She has been in and out of Hospitals for 10 years, I think she is on Social Security disability, and has Air Force health insurance from my Dad.

What can we do to protect her assets? How can we buy the house and property or have her gift her property to us kids? There are 4 of us kids.

A: There are several things to look at. You mentioned that she has been in and out of hospitals for 10-years. It would be worth checking to see if should could qualify for... Long Term Care insurance because it's the best way to protect assets, in my opinion.

In order for someone to qualify for Medicaid they have to be impovershed. Medicaid is welfare. That means that she won't qualify until she has $2,000 or less in assets.

Since she has more than that, she will need to use those assets to cover the cost of her care. She can gift assets away, but she will be denied coverage for Medicaid if she applies for it within 5 years of having made the gift.

The reasoning is that Medicaid is a taxpayer funded program designed as a safety net. In the past, people would try to give away their assets so that they appeared impoverished. That's way the look-back period was created. It used to be 3 years, now it's 5 years.

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