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Can my mom refinance her home and cash out money to prepaid her funeral bill and not be penalized

Medicaid-QuestionQ) My mom may be force to refinance her home due to the fax the lady that refinance her house has passed away and they need to settle her estate. We know she can refinance her home and would not effect her Medicaid that she is receiving now for. But can she refinance her home and cash out money to prepaid her funeral bill and not be penalized if in the future she would have to be placed in for long term care using Medicaid?

A) According to Medicaid: When your mother receives her cash, you or whoever is representing her will have to inform the Medicaid agency for your state. Medicaid coverage will then end until she has again spent down her money to the countable asset limit, $2,000 in many states. The money can be spent for anything that will benefit your mother, including prepaying her funeral, travel, dining out, clothes, television, DVD player, and paying off any debts she may have. In most cases, your mother cannot make gifts with her money. However, there are some exceptions to this rule and in some states good planning techniques that may permit some gifting. To be sure, you will need to consult with a qualified elder law attorney in your state.

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