Donna and Paul contacted me to discuss Donna’s mom Helen, an 83-year old who was in a rehab facility after her fourth fall. Helen was also beginning to experience memory issues. The family had been advised that she likely would need skilled nursing care for the rest of her life. Donna and Paul contacted me because they were concerned about how they were going to pay for mom’s care and wanted to see there was any way they could keep mom’s house in the family.

When we met, Donna told me that she had been living with her mom for 43 years and that she and Paul had basically been financially responsible for the house for the last 20 years. In addition to the house which was in Helen’s name and worth $110,000, her mom had a joint checking account with Donna valued at $1,681.00; a savings account (also joint with Donna) with $36,500, and three life insurance policies, each with a $500 face value and a cash surrender value of $1,700, $2,300 and $2,500 respectively. In total, Helen had $154,681.

The rehab facility told Donna that her mom would become private pay on Feb. 1.  I reviewed the Power of Attorney that Helen had signed in early December 2015 and was concerned because there were severe limitations on the agent’s power to make gifts. Donna told me that she believed that her mom was still competent and would be able to sign a new POA. With that information, I was happy to advise Donna that her mom would be eligible for Medicaid as of February 1. I also shared that her mom would be able to pre-pay her own funeral and purchase burial accounts for Donna, Paul, Donna’s sister and her husband, that the life insurance was exempt so Donna would get the full death benefits and that Donna would be able to take ownership of the house without any penalty.

Donna stared at me in disbelief. She stuttered out a few “what abouts…” and then started crying. I was perplexed. I asked her what was wrong – why was she crying? I was saddened by what I heard, but not surprised.

Donna told me the family had met with an elder law attorney before calling me and that were advised that everything would be lost including the bank accounts and the house and that her mom was only allowed to keep $14,850 and that would go to Medicaid when she died. She was told it was too late to do anything because there is a 60 -month look back on transfers. Wisely, Donna and her family decided to get another opinion.

She couldn’t believe what I told her. After some assurance, I showed Donna the laws that supported my analysis. She was so relieved. It turned out that, Donna’s tears were tears of joy as she realized that she would not lose her home of 43 years and her mom would be well taken of for the rest of her life.