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Will My Mom Still Get a Penalty Period If I'm Using the Transferred Money to Pay Her Expenses?

  • January 4th, 2017
My mother sold her home a year ago and moved into an independent living apartment. She had early stage dementia. The money from the sale of her home was put in a checking account in my name with my brothers as beneficiaries. I have been paying my mother's rent from this account. Did I make a mistake by putting the house money in an account in my name, even though I intend to use it for my mother's care? I was concerned with her poor judgment in managing her money and thought this would assure its protection. When my mom goes into assisted living, I intend to pay for her care with this money until it is gone and then apply for Medicaid. Will my mom incur a penalty period, even though all this money has been, and will be, used to pay for her care?

Putting the money from the house sale into an account in your name may complicate things if your mother has to apply for Medicaid within five years of selling the house. On the surface, it’s a transfer of assets that could make her ineligible for Medicaid benefits for up to five years. You may be able to avoid this penalty by showing how you have used the money for your mother’s benefit. If, on the other hand, you had left the money in an account in your mother’s name you would not have to prove that you’ve used every cent for your mother. We would recommend moving the money from the account you have with your brothers back into your mother’s account. (Having your name on your mother’s account to help her is fine.)

As always, this advice is based on general principles. To be certain about its applicability in your state, you will need to consult with a local elder law attorney. To find an attorney near you, go here: http://www.elderlawanswers.com/elder-law-attorneys

Local Elder Law Attorneys in Ashburn, VA

Ron Landsman

Ron M. Landsman, P.A.
Rockville, MD

William Fralin

The Estate Planning & Elder Law Firm PC
Bethesda, MD

Evan Farr

Farr Law Firm
Fairfax, VA

Last Modified: 01/04/2017

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