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Ray, Lawyer
Category: Legal
Satisfied Customers: 41038
Experience:  30 years in civil, probate, real estate, elder law
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My mom needs to be put in a convalesant (rest) home, but

Customer Question

My mom needs to be put in a convalesant (rest) home, but MediCAL will not accept her because she has $20,000 in her CHECKING account in the bank (she is also on social security). I am her son; if I open a CHECKING (not savings) account in my name at her bank AND TRANSFER THE MONEY to my CHECKING ACCOUNT (with her permission and the banks and paperwork is signed) do I owe the IRS any taxes? I am from California.
Submitted: 1 year ago.
Category: Legal
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you today.

No she cannot gift the money here.There is strict rules against gifting and she will be penalized for such gifts.She can do spend down here, the money can be used to pay for her care or prepaid funeral or other medical expenses.But again MediCal does not allow gifts.

Reference see look back period here..

Unfortunately a gift here under the look back rules will cause her to incur a penalty.Again you can use it t prepay a funeral or for her medical bills, or private pay for a month or two here.

I appreciate the chance to help you today.Please let me know if you have more follow up.;Thanks again.

Expert:  Ray replied 1 year ago.

Here under MediCal she has to be under $k at 12:01 am on the first day of each month to be eligible..

The following property is generally exempt and therefore not counted in determining Long Term Care Medi-Cal eligibility:

  • The home: totally excluded, if it is the principal residence. The applicant must state an “intent to return to the home.” Includes mobile home, houseboat, or an entire multi-unit dwelling as long as any portion serves as the principal residence of the applicant. (See "Your Home & Medi-Cal" for more information)
  • Other real property: may be excluded if it is used in whole or in part as a business or means of self-support (you should see an attorney if you have other real property).
  • Household goods and personal effects: totally exempt.
  • Jewelry: for a single person, wedding, engagement rings and heirlooms, and items of jewelry with a net market value of $100 or less are totally exempt; for spouses, there is no limit on exempt jewelry for determining the institutionalized spouse’s eligibility.
  • One car is generally exempt if used for the benefit of the applicant/beneficiary or if needed for medical reasons.
  • Whole life insurance policies with a total face value (also called “combined death benefit”) of $1,500 or less.
  • Term life insurance: totally excluded.
  • Burial plots: totally excluded, includes headstone, crypts, etc.
  • Prepaid irrevocable burial plan of any amount and $1,500 in designated burial funds. These designated funds must be kept separate from all other accounts.
  • Cash surrender value or balance of pension funds, IRAs and certain types of annuities (you should see an attorney if you are considering buying an annuity—call CANHR for a referral).
  • Up to $2,000 in cash reserve, e.g. in savings, checking, etc., for the Medi-Cal applicant.
Expert:  Ray replied 1 year ago.

Good luck with your mom here, I know it can all be kind of overwhelming.Thanks again.

Expert:  Ray replied 1 year ago.

There is a formula here..

So if hse did made a gift during the look back period, a formula is used to determine the number of months that the applicant will be ineligible to receive Medicaid benefits. That is called the penalty period. For example, assume that Jane transfers a $100,000 bank account to her daughter two months prior to applying for Medicaid. Since that gift was within the look back period a penalty would be applied. Basically it is the value of the gift divided by a number which in California this year is $7092. So the penalty period in this example would be approximately 14 months ($100,000/7092=14.1). The look back period requirement under DRA is 5 years.

MediCal would calculate the period here it can be six months to a year in that range.You really want to avoid this because she would be ineligible for this period. Spend down here on her medical care or her funeral or any other bills she has.

Thanks again.

Expert:  Ray replied 1 year ago.

Good luck here with your mom.

If you can leave a positive rating when we are done it is always sincerely appreciated.