You need to pay the funds to the nursing home. Even though you are the beneficiary of the CDS, they belong to your mother and must be spent down. It may be possible, however, to use some of the funds to prepay for your mother’s funeral or to transfer them to a so-called (d)(4)(C) trust.
The latter is only available in some states and depends on timing, because your mother’s care must be fully paid up when the transfer occurs. Prepayment for funeral expenses does not have the same timing restrictions.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.