How can my sister convince Medicare that my father willingly gave her money for his care?

1 answer | Last updated: Sep 21, 2016
A fellow caregiver asked...

My sister has been power of attorney for my dad for the last 9 years. Over the last few years, my dad has helped my sister with things such as car repairs and monthly assistnace on bills. Now he is in a nursing home and needs medicare to help pay for his care. They are asking my sister about all the payments and help to her and she's worried she will go to jail or my dad will be denied. The total amount of help is around 5000 dollars. How does she convince them that my dad willingly told her to take that money? She's worried she'll go to jail. She's a good person who really looks like a villian right now. Any help is greatly appreciated.

Expert Answers

You and your family should rest easy -- neither your sister nor your father is in any legal trouble. The worst that could happen -- and it probably won't happen -- would be that if your father qualifies for Medicaid coverage of his nursing home bills, that coverage might be delayed for one or two months because of the money he spent on your sister. Here are the explanations.

First, it seems that you're worried that there's something illegal about your father paying bills for your sister just because she holds power of attorney for him. In most cases, there's nothing wrong with that. The fact that your sister holds power of attorney doesn't mean that your father is not allowed to help her -- after all, she's still his daughter. As long as your father willingly paid those bills, the fact that your sister had power of attorney does not matter. The only problem would be if your sister paid the bills for herself, using the power of attorney, without your father's knowledge or permission. In that case, your sister might have abused the power of attorney and she could be liable to pay that money back to him.

Sometimes the question of whether someone has voluntarily given away money becomes complicated if the person doing the giving has some loss of cognitive -- mental -- facility. If your father has Alzheimer's or other dementia, for example, then it might be more difficult to say that he voluntarily gave consent to the payments for your sister. It might be argued instead that he was not fully aware of what was happening, or that your sister exercised "undue influence" over him to get him to agree to the payments. But that doesn't sound like it's the case here, particularly since you -- someone who did not directly benefit from these payments and who looks out for your father's interests -- believe that the money was given voluntarily.

As for the nursing home -- you wrote about Medicare, but it's the Medicaid program that would pay for his nursing home care, not Medicare -- when Medicaid looks at your father's eligibility, it will consider any money he has given away in the past five years. If money was given away specifically to become eligible for Medicaid, Medicaid can delay eligibility for a time. The exact delay would be the amount given away -- in your father's case, $5,000 -- divided by the average monthly nursing home cost in your state. That would mean a delay of one to two months in your father's case, depending on the state he lives in. But this rule does NOT apply to money given away for legitimate reasons that had nothing to do with qualifying for Medicaid, so there is a good chance that this money will not affect his Medicaid eligibility at all.