I’ve run into several situations (not created by me) where older people gave away money to their children, or grandchildren, and then needed nursing home care later on. The earlier gifts, if made within 5 years of entering a nursing home, created huge problems. Medicaid will NOT pay for a person’s nursing home care for so long as that person’s “gifts” would have paid for the nursing home instead – based on the total amount given away.
For example, suppose mom gave each of her 3 kids $12,000 in 2007 (the IRS allowable gift amount back then), and mom then went into a nursing home and spent her remaining funds over the next 4 years. Now that she is in the nursing home, and broke, DHS and Medicaid will now say she’s ineligible to receive funds for the next 6 months, since the $36,000 she gave away to her children could have paid for her nursing care. So, mom will probably be kicked out of the nursing home because her children or grandchildren may have spent the money, or may just refuse to give it back.
Most people think about saving for retirement but fail to plan for old age. Giving away money, without understanding the consequences, may leave people caught without funds, and ineligible for nursing home care.
For further information regarding these matters, please contact Mr. Trainer at 248.740.5673 or via email.