Can My Father Repay a Loan Without Affecting His Medicaid Application?

Q. My father is in a nursing home and I am starting the Medicaid application process. My sister lent him about $19,000 to help him out of a financial situation prior to 2007. She has documentation to support the loan. Can I repay her from his assets during the Medicaid process or is that considered a gift that would affect his eligibility?  He has $20,000 in liquid assets after the funeral benefit, and the nursing home wants him to private pay $16,000. I would rather repay my sister for the loan before the nursing home gets their piece. Can I do this? 

A. This really depends on the actual documentation. If by documentation you mean a promissory note, repayment should work. But if it’s simply documentation that the money came from your sister, it probably won’t. To be certain you would really have to consult witha local elder law attorney. The other option would be to reimburse your sister, making sure that she understands that if it doesn’t work she’ll have to return the money to your father.

I would not give it to the nursing home, even it the reimbursement is considered a gift, you could still preserve a good portion of the remaining funds to help pay for the many things Medicaid does not cover.

Thanks, Richard


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