Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-25-2009, 11:20 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,399
Blog Entries: 3
Will gifts paid by elderly parent to be forfeited to pay for his nursing home bills?

Recently, clients have asked this persistent question "If an elderly parent goes into a nursing home, will "gift of stocks" paid to either the son or daughter have to be forfeited to pay his nursing-home bills?"

The son or daughter of the elderly parent would not specifically have to give up the stock, but, would be responsible to help pay for the elderly parents nursing-home costs if the elderly parent ends up needing the nursing home care and is not in a position to pay these bills.

If a elderly parent goes into a nursing home and spends most all of their savings and other asset, then generally, Medicaid could end up covering the costs. But if that happens, the gift may make a difference, because under the current strict laws giving away or gifting assets within five years of applying for Medicaid can delay an individual's eligibility.

For example, lets assume that your Mother transferred or gifted away $40,000to her daughter and ends up applying for Medicaid within the next five years, and furthermore, lets assume that the average nursing-home stay in her state costs $4,000 per month. The Mother wouldn't be eligible for Medicaid benefits for the first 10.0 months after applying ($40,000 divided by $4,000).

The current Medicaid rules state the Elderly Mother can only apply for Medicaid after exhausting most of her other assets. The daughter, then would need to find some other way to pay for that care. The State will not force the return of the gift, but it might mean that the daughter would have to find some way to pay the Nursing home bills before Medicaid can kick in and from a practical point, that might means utilizing some of the monies gifted, that is $40,000.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
I am the costudial parent rhondarh Filing Requirements 1 09-09-2008 11:45 AM
Can my parent apply for Medicare Part B Benefits at Age 64? Kathy Retirement Planning 1 02-23-2008 12:49 PM
Business Deposited Forfeited scualums Sole-Proprietorship 1 02-18-2008 07:29 PM
Claiming the Credit for the Elderly or the Disabled Samatg General 0 03-15-2007 07:52 PM
Can I Claim my elderly parents? appletango Filing Requirements 1 01-25-2007 09:44 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning