How do I tell my Mom that her generous giving habits have to stop or she will be broke soon?
My 88 year old step mom has now been in assisted living for two months now. I have POA and am paying the bills and seeing to her needs financially. She has dementia in regards to short term memory and just some common sense issues. She is under the impression that she has loads of money (she did a few years ago). She has given away large amounts to family for Birthdays and Christmas. I need to put a stop to that or she will be completely broke in a year and a half. How do I approach her about this without making her feel stupid and out of her mind. I've tried to warn her that it is not a good idea and her excuse is that she will die soon anyway and that it does not matter. She orders me to bring the check book so that she can see me write these checks. For me to refuse (which I can because I have POA) would be extremely upsetting to her and I don't want to ruin our good relationship.
10 Answers
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A POA is not on the hook for the principle's care until Medicaid kicks in.
Medicaid does NOT go after the recipients of the applicant's gifts.
The truth is bad enough. If step mom runs out of money because she has been giving it away, there will be a penalty period before Medicaid would be available.
She might, of course, die soon, and none of this will matter. But that is not a given. And if it happens, any money left can be distributed via her will.
Make a call to whoever it is & explain that if any money goes to them the federal medical aid people will go after THEM for money paid out - tell them you are trying to protect them so you get into the win/win situation with both but that mom was thinking of them - warn them not to raise issue with mom as you are writing out the cheque & if any money left over they get first dibs otherwise they get nothing
You don't explain in detail, but if all you are doing in bringing the check book and writing the checks in front of her, aka she has nothing to do with mailing them, the HUMOR her - write the checks and say you will mail them. Then just shred them later. The example geewiz talked about is still wasting money on cards, postage, etc. IF she is involved in mailing and you cannot get around that, then somehow either slip the checks out, void them or even better get a phony set of checks made up, not associated with an account (make sure everyone who might get one knows they are not real) and use them.
If her level of dementia is like my mother, simply writing them and promising to mail them is enough.
It's ok to use therapeutic fibs, saying if she runs out of money she would need to move to the "poor house", which your Mom may remember hearing from her youth. That in itself might be a major eye opener, or not.
Another fib you can use is tell her that Emily Post's Etiquette Book says that once a lady reaches a certain age that she is no longer required to mail gift money to family, a nice card or telephone call would be proper Etiquette. Thus, if your Step-Mom used Emily Post's books as a social guide [my Mom swore by those books], her ears will perk up at the name.
Penalty works like this - stepmom gives away $50,000 during the 5 year look-back for Medicaid that could have been kept and used to pay for your care. Room costs $250 per day in nursing home (daily rates vary per state, this is for example purposes ONLY). Medicaid imposes a $50,000 penalty for gifting assets (it is NOT amortized so money given day 1 is treated same as day 1825). So she is not eligible for Medicaid for 200 days. Who is going to pay for the care in the nursing home during that period? The nursing home might have taken her Medicaid pending - and now the money that Medicaid would have paid is not coming. The Nursing Home looks to person with Power of Attorney to explain where the money to pay the bill is coming from .... and where the person is going to live if Medicaid is not going to pay the bills. Gets ugly very quickly. Don't tell her she is stupid - explain that you are protecting her money so that she gets care later if she needs it and doesn't depend on the government in case the programs get cut.