Mom needs long-term care. What to do?

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Q. My mother lives with me but has dementia and she may soon need to move into a facility. She has only Social Security income. She gave me her savings which is $150,000 so she could help pay her way at my house. I know there is some kind of look-back, and how would that work if she had to go into a home?
— Need help

A. Trying to help an older loved one who has dementia is a truly challenging endeavor.

There is help for you, but you need to understand the rules.

You’re correct when you said Medicaid has a look-back period, said Geraldine Callahan of Callahan Financial Services in East Hanover.

It’s over a five-year timeframe, she said.

“The $150,000 given to you by your mother would be classified as a gift unless it was prior to the five-year look-back,” Callahan said.

You mentioned the money was used to pay her way at your house. Was there a rental agreement?

Callahan said Medicaid would want to see a rental agreement and household expenses totaling $150,000.

“If less was spent on the household, it must be paid back and spent towards the cost of her care in a facility,” she said. “Keep in mind you cannot go back and add a rental agreement but you can start now if it hasn’t been done.”

One option would be to give the money back to your mom.

“If not, your mother would be disqualified from applying for Medicaid for a fixed number of months or would have to pay out-of-pocket for her care until she has spent the $150,000,” Callahan said.

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The post was originally published in November 2017. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.