Posts Tagged ‘gifting’

Medicaid eligibility is subject to a complex set of rules including look-back and transfer penalties

Seniors dealing with rapidly rising personal medical and nursing home expenses are often dismayed to discover that even modest asset levels may make them ineligible for Medicaid i.e $2,500. Faced with the possibility of spending all their money on health care and leaving nothing for their heirs, they might be tempted to transfer everything they own to their heirs at once, qualify for Medicaid, and move into a nursing home states Forbes. Medicaid’s “look-back” and “transfer penalty” rules are intended to keep Medicaid spending under control by preventing or minimizing asset transfers having the sole purpose of allowing one to…

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Gifting: Taxes And Charity Versus Medicaid

Many seniors are aware that some planning is necessary if Medicaid is to cover their skilled nursing care as they age and that making gifts of money or property to their loved ones before they need care can be part of that process. There are a few common misconceptions, however, about gifting and the Medicaid Process. Often, penalties resulting from these transfers could have been avoided if clients had been aware of the consequences of their actions. “I thought I was allowed give away $13,000.00 to each person every year.” This statement and action is a result of the misapplication…

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Adult children spending time and money on their parent’s care has tripled

According to MetLife's National Health and Retirement Study, the percentage of adult children spending time and money on their parent's care has tripled in the last decade and a half. This comes as no surprise to me, as I see the rising long-term care costs, the economic downturn, and failure to plan ahead for senior care places. Therefore,  many families are in tough situations when a loved one ages and needs extra day-to-day care. The MetLife data found that roughly a quarter of all adults are currently providing at least some financial assistance to their parents. A similar survey from…

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Potential Portability Problems

Wealthy individuals in the U.S. will find it easier to cut their estate-tax bill as a result of a provision for using their deceased spouses’ exemption credit.

IRS Scrutinizes Gifts of Real Estate

The Internal Revenue Service has a low-profile but sweeping effort under way to use state land-transfer records for evidence of omissions in reporting gifts of real estate to family members. New tax rules make big gifts to family members popular this year. If you made a gift of real estate (or are considering making one) be warned – the IRS is scrutinizing land-transfer records looking for folks who may have made a reporting error. As The Wall Street Journal reports, the IRS has begun requesting state land-transfer records and checking them against reports of the past few years to find…

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“I can give away $12,000 per year and I will still qualify for benefits”

We frequently hear from individuals who have gifted $12,000 each to their children and grandchildren, over the past few years. However, this gifting is a myth. In fact, the $12,000 figure is now $13,000. But this is an IRS rule regarding filing a gift tax return. This has nothing to do with Medicaid law. If you make a gift, within five (5) years of qualification of Medicaid, you will penalized.  For example. If you gift to your family $68,000, within the five (5) year period, you will be penalized for TEN (10) months, before you receive Medicaid. Therefore, who will…

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What is the Medicaid Penalty Period?

The Deficit Reduction Act (DRA), signed by then President George Bush significantly changed the rules regarding transfers, for non-services, or gifts of assets (Gifts). Any Gifts made prior to enactment of the DRA on February 8, 2006, Maryland Medicaid officials review all documentation, bank statements, mutual funds, CD’s etc. for any Gifts made within the 36 months of the Medicaid application (or 60 months if the Gift was made to an irrevocable trust). However, for Gifts made after the enactment of the DRA the so-called "look back" period for all Gifts is 60 months. The “look back” period determines what…

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Beware of VA and Medicaid information on the internet, even from professional sources

Basically, the only good advice, is “Consult with an estate-planning attorney or other asset-protection professional who is steeped in knowledge of VA pensions and assisted-living benefits.”

small business owners are finding their retirment plans delayed, if not abandoned

Transfers/gifts, to children or other family members, of the business, could, years later, result in extended periods without any long-term care coverage of any kind.

Issues Regarding Paying a Family Caregiver

If you have gifted any assets, potentially, paying for caregiving by a family member, you may be penalized by Medicaid.