When applying for Medicaid for my Dad, do we have to report those closed bank accounts and closed IRA's?

If you are spending down the money on his health care or items for his own use (i.e., not making gifts out of the money), then you need not worry about closed accounts. When you apply for Medicaid for your dad you may have to prove what the money was spent on, so save the receipts, just to be on the safe side. When a person applies for Medicaid, they must report all their current assets as well as report any gifts they made within the last 5 years. Obviously, lying about past gifts is fraud against the state and federal governments, so basically the government relies on applicants telling the truth, just as the IRS does when you fill out your tax returns.

no, you need not report any closed accounts.

All I can add is that I am so glad we went to an Elder Law Attorney 6 yrs ago and put Mom's money in a Family Trust.. She lives here with me, doesn't own any property.. If she needs money it comes from the Trust..

I think you must report closed accounts if they were closed within the 5 year look back period, and if there were any transfers of the proceeds of the accounts to anyone else, like a gift.

I think you should report all closed accounts in order to avoid delays. My Dad's Medicaid application was delayed numerous times, while they asked for more and more data....and among those were accounts that had been closed for over 20 years!! So I believe that in some offices, people will just delay and investigate to 'show their power', therefore, giving them everything you can right up front might keep that from happening and get the approval to happen quicker. I had a financial advisor from an eldercare law firm helping me with this and she was very experienced. SHE couldn't even understand why all the delays and requests for info for way farther backthan 5 years, but if you do not comply, there is just another delay...and unfortunately, the gov't has all the power in these situations!

You do have to report the closed accounts and IRA's because if you do not it will look like you're committing fraud and then your dad may not be approved for Medicaid.

If you have a 1099 and don't report the amount, your tax return will bounce with the IRS and they are not nice about it. If you "forget" any financial transaction on the Medicaid application, ANYTHING within the last 5 years, you will be in deep doodoo with them as well and they will be extremely suspicious when you reapply. Instant Audit flag on both agencies. Don't do something risky.

Thank you everyone for the answers, that was one I couldn't find on the medicaid site. Want to get this done without delays.

You defnitely need to consult an elder care attorney about this. Most Medicaid agencies have a look-back period (6 months to sometimes as long as 5 yrs), in which your elder can be considered inelgible for benefits if they divested themselves of any assets (automobiles, homes, bank accounts, etc. - anything sold or given away to someone else that could be counted as an asset under their rules).

We had a devil of a time with Medicaid for my dad, because he had an old conversion van he was going to sell to my son for $300. Unfortunately, just after my son went and transferred the title to his name, put plates and insurance on it (but before he paid my dad for it), the van suffered a major breakdown and was not repairable - so Dad said consider it paid for. Medicaid didn't see it that way. I had to go back to the junkyard that we had come pick it up because it wouldn't run and get a written statement from them that the van had no monetary value when they took it, and the only value it had was for scrap - THAT'S how picky they are. A van worth absolutely nothing was considered a divested asset.

Fox - just so much of the mice-maze that is Medicaid is dependent on just how your state runs it's Medicaid program. Medicaid is a joint state & federal program…it's under an overall federal guidelines & base requirements BUT is administered or managed by each state. For my mom, who is in TX, it was a 3 year & 6 month review of her banking. That meant for the last 6 months of bank statements and cancelled checks. BUT for the 3 year look back part, that required a signed on bank letterhead document from a bank officer @ her bank as to the disposition of each account that was closed within the 3 year period. Fortunately for us, as each CD, Tbill, etc. expired it was not renewed but put into her main drawing account. So it was a clean clear picture of what her banking history. She was in IL and still had her home, so those were significant costs each month that made sense as to where her money went to and why she could find herself "at-need" with less than 2K in non-exempt assets. BTW it took the better part of a morning at the bank and I had all her statements & old CD, etc stuff so they had details to start with and then do their verification to provide the letter. (The bank was pretty nice about it, but I know of others whose bank charged a research fee to do this) In order for my mom to be accepted by the NH as a "Medicaid Pending" resident, she had to have this letter

What I think Medicaid looks for is a "pattern of spending" that makes sense for what their bank statements are like combined with their monthly income and IRS info. Realize that they have to provide documentation on their income (like the annual statement from SS). If your state does an IRS match-up with 1099's, you really have to include all those accounts which produce any income as they will show up in the review eventually.

Medicaid knows how much they have each month. Say mom gets $ 1,800 a month in income and lives with family for free & does not have a home. So mom should have some degree of savings or a nest-egg from her annual income of 21K. (That is unless ma is out there playing the ponies each week but if she is doing that she won't qualify for or is needing a NH) If all she has now just a few hundred $, just where did she spend it? Ma needs to show a pattern of spending that makes sense & is within the Medicaid regulations.

All real property records (home, land, auto's) are recorded by the local tax assessor and then that info is dovetailed into the state. So for Susan that is why they had an issue with Dad's van. You really can't leave this stuff out because it will surface…..eventually.

Also once they are on Medicaid, you are not out of the paperwork woods either. I don't know how other states do this, but for TX there is an annual recertification in which you have to provide the last 4 months of their bank statements plus other financial documentation (like current years SS statement and retirement annual statement), plus other items. And yeah some of these (like funeral policy info) are the same documents included with the original application but you have to restate all this and indicate any changes and provide the documentation again for the renewal. It is due within 13 days of the date on the letter too. So keep your paperwork together for the future to make your life easier.

Thank u. He had roughly 130, in Ira's that we have spent down to 29,.. He has been at the same N/H since his stroke last November and we have been paying 7, each month out of pocket for his stay to spend down his $ to apply. I sold all if his assests at market value which was not much by any means, just had a LOT of ok motorbikes with titles. We live in WA and it is a 5 yr look back. He has 3 accts as if right now, only one of them had the ira's, one for personal, and one for ss deposits.. R they going to want statements from all 3 ya think. I am closing the one for personal tomorrow

Whether they are opened or closed, Medicaid will want to see all of them back for 5 years. If they do not like where the money went, they will delay coverage for whatever length of time it's been since an account was closed out that they don't like how it was done. I may be saying it in a convoluted way! In AZ, from our financial advisor, the ONLY acceptable things to spend my Dad's resources on were for his care, his medical, his facility fees and for medical expenses for my Mom and for improvements to the home. Basically, medical needs and home improvements were acceptable as evidence of "spend down". Nothing else counted and they looked at all closed accounts line by line to be sure no body was gifting money to anyone in the family or doing anything unnecessary with the money. Fortunately, I walked into the situation and took over bill paying only about 6 months before the applications were being started, and the closed accounts had nothing bad in them because they happened way before the 5 year look back....but Medicaid was still looking at all of them! AND...I would advise, that once you do a Medicaid application, on a monthly basis, just start saving copies of all current checking and savings accounts because each month that a decision is not made, you will have to turn all these monthly summaries over to them for review before they make their decision. My financial advisor told me, after approval, that I should just continue to save all these monthly statements, because Medicaid could ask for them each and every.....or any.....month they wanted to review the financials too. So I continue to print them out and save them in a Medicaid file....just in case they are asked for.... I do not like being beholden to the government in any way shape or form, but then we only have to pay $200/mo towards Dad's facility rent now, instead of $4800/month.

Foxgirrrll - you have a lot going on, 130K in IRA's well we're talking high cotton finance here and the caseworker - I bet a case of Prosecco on this - is probably going to have his application go for a secondary review by Medicaid as the initial caseworker, well this is beyond his/her pay grade and forensic accounting abilities. Maybe it won't happen but you should be prepared.

7K a mo for NH X 9 mo = 49K. So where did the rest go? then add in whatever items were sold for, so that is even more money. Where did it go??, you have a gap of 81K even without selling his motorcycles (130 - 49 = 81) ??? You just need to be able to show a "pattern of spending" that makes sense and does not lead to the conclusion that fund were gifted or transferred. My suggestion - and this is going to take time and will be somewhat of a PIA - is to do Quicken/Quickbooks for the past 3 years for dad. QB is great as you can have multiple accounts that all dovetail into a single annual profit & loss. You just have to view Dad as a business with his SS, retirement and interest etc as his income and then view his expenses in categories that make sense (doctor co-pays, insurance, prescriptions, taxes, NH, therapists, etc) and are within what is allowed by Medicaid (basically health & medical costs, personal needs, and exempt asset expenses (like insurance, taxes, etc.) I hope you sold the vehicles for something close to FMV - fair market value. If not and they were sold to family, you could face a transfer penalty inquiry on this. Hopefully not but you never know…..

When you close out the personal account, please try to have whatever the balance is go in full to the active account that a gets his direct deposit of SS. If you get it in cash, then that is a big red flag that inappropriate spending may be happening. Also make especially nice with the bank officer tomorrow as you may need them in the future for the Medicaid application if you run into a transfer penalty inquiry. Good luck

Find any source of income OR any large withdrawals, gifts, for 7 years prior. You won't get in trouble for not knowing when trying to help a parent, but with the govt network on people I don't know why they ask us for the information when it is right there for them to check us on! The Medicaid was able to tell me a lot I never knew my parents had, ie, as reason she didn't qualify. Shocked me!