Does spending a cash gift on Dad's medical bills fall back to Medicaid assets?
This question is regarding the Medicaid look back period in New York State.
Facts: Elderly person gifts cash to a family member Elderly person files gift tax return and pays no tax Family member spends 100% of gifted cash and earned interest on elderly person’s medical bills (excludable from gift tax)
Question: Would this gift be excluded during the Medicaid look back period since fair market value has been returned to the elderly person?
Thanks for your help
I will share with you what I know from my own experience with Medicaid concerning gift assets paying for medical bills part of Medicaid lookback.
Technically,the elderly person made a gift to the family member. The fact that they complied with federal tax regs and filed a gift tax return has no bearing on Medicaid. For the gift to be reversed, the family member would have to return the cash gift to the elderly person, who would then spend the money on his/her care. This is what Medicaid looks for.
Medicaid will tell you that you are not responsible for your parents bills. So they could contend that the elderly person made an invalid transfer and will be penalized.
My question is "why would you do this"? The transaction makes no sense to me.
Good question. To become eligible for veteran benefits she needs to dispose of assets. The veteran benefits have just a 3 month look back period.
Our situation is just the reverse of this. My dad did NOT qualify for Vet benefits (WWII vet) but not because of investment assets, since they lost most all of that in the stock market. They have less than $5000 in "disposable assets". He did not qualify for "aid and assistance" because his pension and SS is slightly higher than the allowable monthly income. He had an accident 2 yrs ago at 88 which left him needing 24/7 care and we (my 93 yr old mom and I) opted for me to move in to be his full time care giver over a nursing home. I'm doing this without having any personal income, and while it's ok for now, at 58 I'm certainly not able to "plan for my retirement". This bugs me to no end, but just do not see any resolution. I have until Dec 2010 to appeal this decision, but so far just don't see what good it will do. His income probably will not decrease (though it might in the months to follow given the current laws that will go into effect after that). I would be open to any and all suggestions!!!
Just to clarify, I love taking care of my father, however I know the expense to medicare would far exceed what it is currently costing if he WERE in a facility.
"Why would you do this? The transaction makes no sense to me." It makes perfect sense to me. I have been told many times that an individual her in NC could "give away" $11,000 each year to whomever he/she desires. (It's $13,000 now.) But I was not told that it would count against the giver when applying for Medicaid. I was even advised by an attorney to make the transfers. But it turns out that it was not true. There is so much false information out there, and a lot of people believe it. It is extremely difficult to get the truth out of the Medicaid people regarding what are appropriate expenses and what are not. I don't know why it has to be such a secret. But there are many people who have made these transfers without knowing that they are not appropriate.
Stay Connected With Caring.com
Get news & tips via e-mail