01 Nov How should I keep track of mom’s payments for home care?

Q. I handle my mother’s financials. She lives with a family member. We have multiple caregivers: a family member, an agency and a private person. I have concerns when the time comes and I have to account for my mother’s money and these payments. There is the possibility a big chunk or all of her money will be spent on her care. How will this affect Medicaid estate recovery after her death? Will I be held liable?
— Trying to do it right

A. As the person in charge of your mother’s money, you’re correct to be concerned.

Qualifying for Medicaid can be a challenge, and you will need to account for where her money has gone for the last five years.

All of your mother’s funds need to be spent for her support and maintenance and should not be spent by or on third parties by way of direct or indirect gifts, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

She said if you are acting as your mother’s agent either expressly under a power of attorney, or implicitly with your mother’s consent, you have a fiduciary duty to your mother. As such, you may be required to account to the executor and/or the beneficiaries of her estate for the expenditures made from her funds.

Therefore, records and receipts must be maintained for all expenses, she said.

“Notwithstanding the difficulty in obtaining quality at home care, if you are paying individuals to care for your mother and not properly reporting and paying the employment taxes with respect to such individuals, you may be held responsible for the employee’s tax withholding together with the employer’s share of such taxes,” she said. “Payment of such taxes should be considered and allowed for by you in calculating spend down of your mother’s assets to $2000 in order to qualify for Medicaid.”

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This story was originally published on Nov. 1, 2021.

NJMoneyHelp.com 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.