My mom transferred ownership to my brother for his kids 529s accounts. She’s currently on Medicaid waiver in an assisted living. We are finding out now that the 529 may count as her assets. Does my brother have to transfer ownership back? What happens if he doesn’t? Can he get in trouble? What if he cashed out the 529s? I’m having so much trouble finding the answer to this. Can anyone help?? Thanks! I’m mostly curious because he told me to do the same thing and I don’t know what to do.
But the actual point is that this is your mother's problem, and she is the one who needs the legal advice if anybody does. Her money, her problem, not yours.
I have to agree that your brother makes a cautionary tale for anyone thinking through their POA choices right now.
Are you on reasonably good everyday speaking terms with your bro? Or has it always been a bit prickly between you?
https://www.savingforcollege.com/grandparents/answer/do-529-plans-count-against-medicaid-benefits
If you don't have the money for an elder attorney, then you probably don't have the money to pay $8300 for, what, 3 months? for your mother's care in an AL, right?
So what happens if you take your mother into your home? She's paralyzed, so what kind of care does she require? Do you work? Are YOU going to become the 24/7 caregiver? Do you have a job now? If so, then what happens to it? Do you have a husband, and if so what does he feel about all of this?
If your brother doesn't have the money anymore (and why doesn't he?), then he should get a loan for it. This is HIS fault. Or does he know that he can sit back and refuse, knowing that you will end up picking up all of the pieces?
Your mother made a bad error of judgment in appointing him to be the POA, didn't she?
If she goes to live with your brother, why do you think he won't take care of her?
My mom has lived with me before so I know how to take care of her. She also lived with my brother for a brief time and he left her home alone constantly.
Im just going to sit back and see what happens. I can’t change anything or the outcome, either. I’m just worried about my mom
He will need to arrange for her to be cared for with her funds and whatever entitlements she has. It's ALL on his shoulders. You have every right to walk away and not get roped into giving up your life/career.
Just remember that "no" is a complete sentence. If you mom has put money into a 529 plan for your kids, just leave it as it is unless you hear differently from a certified ElderCare attorney.
Thanks again
"I thought it would be okay for my mother to transfer this money to me and it wouldn't affect her, so I got her to do that. Now it turns out I got that wrong, and she's short of $8-25K. Oops! But I'm not giving it back, and that's her look-out."
So as yet, nobody has got round to explaining the problem to him and asking him to put right the error; wouldn't that be the first step? Or do you really believe he's that much of a b*st*rd that he'd leave your mother to clear up the mess?
Very much dependent upon the state mom resides in.
Why? Why would he get off scot-free? If he can't pay back the money, then he gets to take care of your mother in his home. She's HIS mother, too, and HE (his family) got the $25,000.
I'm scratching my head as to why you think YOU have to be the one who gets dumped on because of HIS mistake. This is an example of how sons get away with it all and a daughter is expected to pick up the pieces.
He needs to understand that his cunning plan, if that's what it was supposed to be, has been blown out of the water and if he doesn't retrace the steps it is going to cost mother a lot of money and everyone will know about it. But - yes, she gave him the money, he didn't nick it. He may have misrepresented to her what the consequences of her gift would be, and that misrepresentation may have been unintentional - he may genuinely have believed this was a legitimate tactic. It does seem to be a common misunderstanding.
Thank you for all of your replies!
Apparently they're trying to work with a medicaid social worker and DHHS but she said she's not a medicaid attorney and not exactly sure about all of the laws, she said she'd refer to the social worker for all of that. It was a legal transfer though, as far as he didn't just "steal" the money.. so I don't know what can be done, legally ??
Your mother gave your brother $25K. She now has to have it back in preparation for her Medicaid application. What has either she or your brother got to say about it? Does she even realise that she ought not to have done this?
My brother / mom transferred it to protect it from medicaid (my brother and mom signed a change ownership form) he said / thought that it was OK to do (according to him).
She doesn't grasp what is going on, no
If he gets bailed out can he do anything else that would cost you?
Why can't she live with him?
I am sorry that you are going through this and feel you have no recourse.
So would I take that $25,000 and divide by the $8,200 = 3.04, so around 3 months of a penalty (ie: them not paying for her care??) so my brother and I would have to come up with this money? Is that how this works? Anyone? OMG I can't wait to be done with this. My head is spinning with all of the info!
And when you say your brother failed to complete the inventory, it does begin to whiff a bit, doesn't it. Are you able to have a frank conversation with him and spell out to him that what he seems to have in mind is definitely not clever? You need above all to find out whether he can give it back.
Make sure it stays that way -- that it isn't your mess.
Say if your brother has to pay back the 529 amounts and it's already gone...then what happens? What DOES happen to the elder who is already in AL at this point? Will your brother take her into his home? What if he refuses? Will YOU think about paying privately for the AL or taking your mother into your home?
Too many times on this board there are siblings who do this sort of thing and then skate off with no consequences.
Yes, an elder attorney isn't cheap or free, but there is so much at stake here that one needs to be consulted.
"However, this power to control the assets means that the savings in a 529 account will be counted as an available asset under Medicaid rules in the event the account holder requires long-term care." You can read the rest of the article at
https://www.elderlawanswers.com/gifts-to-grandchildren-529-accounts-12043
So, it depends when your mother transferred the ownership of the 529 accounts. Less than five years and they will be included as assets in the look-back. Brother must give the money back - unless he wants to fund your mother's ALF all by himself, anyway.
It sounds as though you have quite correctly disclosed the existence of the accounts in your mother's Medicaid application, or your mother has, or her adviser has spotted it. No matter how bad-tempered bro gets about it - and he possibly will be quite grumpy if he thought he'd come up with a wizard wheeze and you've blown it - stick to your guns.
Are your brother's children in immediate need of education funding?
I do know my mom has a medicaid social worker. She has a court appointed conservator because my brother failed to do the inventory. And she was the one who asked about the 529. So I’m wondering if he had planned to hide all of this maybe?? Not sure if any of this was intentional or not. I just want to make sure my mom has a place to live!!
ugh. Thanks for your help. This is so stressful!
I would also call the IRS and find out what the tax implications would be for transferring the account to a new owner and what happens if the money is not used by the named beneficiary for college. It would be worth knowing if you are thinking about doing it with accounts she set up for your children.
Even though Mom can own a home while on Medicaid, it can't be transferred to someone else. Any proceeds from the sale go towards Moms care.
If she transferred CDs, bonds, stocks ect while on Medicaid or within the look back period, they have to be paid back. These are considered Moms assets and should have been cashed in for her care before she went on Medicaid. Not including them in her application is fraud.
I agree that brother needs to talk to Medicaid. He may not have been aware of the rules concerning Medicaid.
Im basically worried that he may have cashed them out and if he will pay the money back. And if he doesn’t how will it affect my mom? I can’t say if he put them on them original Medicaid application because I haven’t seen it.
That's what I'm concerned about is that my brother did NOT put it on the original Medicaid form, but I don't know because I haven't seen it the application and either has the court appointed conservator, I guess I won't worry about that because it's not my mess! I can't get straight answers from him which is why I don't know all of the specifics, it's very annoying.
Thanks for the replies!