How can an elderly person gift money to a relative and not run afoul of Medicaid eligibility requirements?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
How can an elderly person gift money to a relative and not run afoul of Medicaid eligibility requirements?
I will inherit $100,000 from uncle who is 86 and very healthy, however, I need $50,000 to settle debts (otherwise I am facing bankruptcy). My brother is POAfor my uncle. He is leaving me at least $100,000 . Uncle would like to give me $50,000 to help but my brother is afraid to do so in case a few years from now our uncle would have to go into nursing home. He is afraid that if our uncle needs to apply for Medicaid they will want money accounted for. My view is it is his money (he is of very sound mind) to do what he wants with. My brother was advised that the only way to do this is a written contract and repayment plan. Should we speak to an elder care or estate planning attorney? In Trumbell County, OH.
Asked on September 9, 2010 under Estate Planning, Ohio
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
You both really have valid points here and are both correct on some level. What may give your brother a bit of an edge in his thinking, though, may also help you tax wise. If your Uncle gives you the money it may be subject to a gift tax, which may be a hefty sum. If the money was considered a loan and the proper documentation was written up, then the interest may be able to be deducted from your taxes. Your Uncle could choose to allow you to deduct the loan balance (or principal) from your inheritance upon his passing and waive any further right to repayment, as long as the law allows in your area. You should speak with an estate planner for many issues regarding his assets and your concerns regarding his health as well as issues as to the loan. Good luck.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.