Moving assets to kids to be eligible for Medicaid

[FREE866]

Hi there-
Planning ahead for my mom and figured I could get some insight here.


My mom will be 81 in February and I would describe her as someone who is in "okay" health.
As we know health can deteriorate sometimes quickly, sometimes slowly does it make sense to move her assets ( all liquid now) into one or more of her kids accounts?
The logic being that if she ever has to go into a nursing home or even assisted living that all her money won't evaporate and she can just have Medicaid pay for it?


Any thoughts or concrete knowledge on this situation would be greatly appreciated. Thank you.

 

[ownyourfuture]

Has she ever considered long-term care insurance ?

I'm no expert, but I believe there's lots of stipulations related to the transfer of assets/property. It has to be done a certain number of years before she went into a nursing home/assisted-living facility.

She can only transfer $10,000.00 to each child per year.

I'm not even certain any of this is accurate, so I'll stop here, & let others more experienced in these matters take over.

 

[FREE866]

Has she ever considered long-term care insurance ?

I'm no expert, but I believe there's lots of stipulations related to the transfer of assets/property. It has to be done a certain number of years before she went into a nursing home/assisted-living facility.

She can only transfer $10,000.00 to each child per year.

I'm not even certain any of this is accurate, so I'll stop here, & let others more experienced in these matters take over.

I don't think the option of purchasing long term care insurance is even possible for an 81 year old, but I will check into it-thanks.


Not sure if there would be a 10K limit though if she chose to give some assets away. Again, I'm not sure ,Just doing research for now

 

[Dtail]

We have set up an irrevocable trust for my parents related to this concept. Thus the children are legally in control of the assets, while the parents still conceptually have access to the assets through the children.
Be aware that Medicaid has a 5 year lookback on transfer of assets, so if you wish to do it, I would do it sooner than later.
Other concepts to consider is that many nursing homes don't have a wealth of beds for Medicaid patients, as they are paid more monies from full paying patients. Sometimes a mix of paying your own way at the start, then ending up on Medicaid might work out better.

 

[FREE866]

We have set up an irrevocable trust for my parents related to this concept. Thus the children are legally in control of the assets, while the parents still conceptually have access to the assets through the children.
Be aware that Medicaid has a 5 year lookback on transfer of assets, so if you wish to do it, I would do it sooner than later.
Other concepts to consider is that many nursing homes don't have a wealth of beds for Medicaid patients, as they are paid more monies from full paying patients. Sometimes a mix of paying your own way at the start, then ending up on Medicaid might work out better.

Interesting. I actually called one assisted living place and they only accept medicaid, but yeah, it would make sense that some would not. Hard decision.

 

[Dtail]

Interesting. I actually called one assisted living place and they only accept medicaid, but yeah, it would make sense that some would not. Hard decision.

I see you also posted in the CD forum.
You don't have to liquidate the assets in order to set up for example a trust.
If one can have faith in their children to do right by them, then a trust is usually a better route to take than slowly giving away monies, especially starting at an older age.
Yes on this site too, you might get some comments that this concept is not right to do. I look at it as there are many loopholes which have been set up; close them then or deal with the results.

 

[FREE866]

I see you also posted in the CD forum.
You don't have to liquidate the assets in order to set up for example a trust.
If one can have faith in their children to do right by them, then a trust is usually a better route to take than slowly giving away monies, especially starting at an older age.
Yes on this site too, you might get some comments that this concept is not right to do. I look at it as there are many loopholes which have been set up; close them then or deal with the results.

Gotcha
Initially I was thinking of not necessarily liquidating the assets but transferring them to a childs account. Would be cheaper than setting up a Trust

 

[Dtail]

Gotcha
Initially I was thinking of not necessarily liquidating the assets but transferring them to a childs account. Would be cheaper than setting up a Trust

Yes would be cheaper, but then you deal with the yearly limits (15k?) without being subject to a gift tax.

 

[MissMolly]

I have problems with this. If your mother has money saved up for her old age, why should tax payers pay for her care? So, no, I don't think it's an OK thing to do. When our mother began declining in her later years, we considered the same thing. We even went to an elder care attorney and discussed the ins and out with him. But in the long run, we knew it was morally wrong and didn't do it. Our parents had saved that money all their lives. It should be used to provide them the best care possible when they need it without expecting others to pick up the tab.

 

[pb4uski]

....The logic being that if she ever has to go into a nursing home or even assisted living that all her money won't evaporate and she can just have Medicaid pay for it? ....

This is my pet peeve. Rather than have your mom's assets be used for her care in her final days, scheme to find a way to pass them on to her kids and pawn off the financial responsibility for your mom's long-term care to taxpayers.

It might be legal, but is it right?

 

[travelover]

This is my pet peeve. Rather than have your mom's assets be used for her care in her final days, scheme to find a way to pass them on to her kids and pawn off the financial responsibility for your mom's long-term care to taxpayers.

It might be legal, but is it right?

When poor people work the system they are scoundrels. When rich people work the system, they are just getting their fair share.

 

[FREE866]

guys..I'm just exploring and trying to learn a bit here......relax....i have one brother who is destitute and mental challenges... THATS really her biggest concern....and to see a big chunk go effectively from having it available to him to some crap nursing home with crap care stinks...I think it makes sense to maybe have a strategy...

 

[MRG]

Interesting. I actually called one assisted living place and they only accept medicaid, but yeah, it would make sense that some would not. Hard decision.

Better check those places out and compare. DM was in two different homes, night and day difference. Theirs funding was the same, only different.

 

[pb4uski]

guys..I'm just exploring and trying to learn a bit here......relax....i have one brother who is destitute and mental challenges... THATS really her biggest concern....and to see a big chunk go effectively from having it available to him to some crap nursing home with crap care stinks...I think it makes sense to maybe have a strategy...

That might be a horse of a different color.... you should research special needs trusts.

https://www.nolo.com/legal-encyclop...t-when-you-have-too-many-assets-medicaid.html

 

[FREE866]

That might be a horse of a different color.... you should research special needs trusts.

https://www.nolo.com/legal-encyclop...t-when-you-have-too-many-assets-medicaid.html

Thx....all this just stresses me out just discussing it
i need a bath

 

[aja8888]

Medicaid nursing homes are not fun places. My Ex ended up in one and it was a dirty, filthy place with minimal staff and almost no medical support.

 

[CaliKid]

Lots of mis-information here. Talk to an elder law attorney in your state. Different states are different even though it's a federal program. This is not an area to get free answers on the net. Nor is it an area you want to go to a general practitioner. Find an EXPERT!

 

[Ronstar]

Just finished up new revocable trust for MIL. Heard the pros and cons of both revocable and irrevocable trusts from elder care lawyer. And the horror stories of Medicaid patients in nursing homes. Heard that paying customers get better care than Medicaid patients. And we were not comfortable with shielding assets in order to qualify for Medicaid.

 

[Hermit]

A lady in her 90s that I know moved into a nursing facility a few months ago. She is totally dependent on Medicade. The place was new and right next to the local hospital. I visited her one day. It is very clean and nice and the staff seem very caring. I saw her at her daughter and son-in-law's place a while ago and she says she really likes where she stays. Sounds like places under Medicare can vary dramatically.

 

[davebarnes]

All your answers are here
Moving assets to kids to be eligible for Medicaid - Retirement -Social Security, age, moving, relocation, finance, savings, early, hobbies, nursing homes - City-Data Forum

Is it really necessary to double post?

 

[FREE866]

All your answers are here
Moving assets to kids to be eligible for Medicaid - Retirement -Social Security, age, moving, relocation, finance, savings, early, hobbies, nursing homes - City-Data Forum

Is it really necessary to double post?

Didn't know there were rules on where I should post


Please advise on what else I should or should not be doing


Thanks!

 

[aaronc879]

This is my pet peeve. Rather than have your mom's assets be used for her care in her final days, scheme to find a way to pass them on to her kids and pawn off the financial responsibility for your mom's long-term care to taxpayers.

It might be legal, but is it right?

If you are a millionaire and arrange your MAGI to get an ACA subsidy then how is that different? I don't agree with people doing either one but if the government doesn't like it then they can do something to stop it.

 

[pb4uski]

If you are a millionaire and arrange your MAGI to get an ACA subsidy then how is that different? I don't agree with people doing either one but if the government doesn't like it then they can do something to stop it.

There are a couple reasons that they are different.

First, and most importantly in my mind, is an order of magnitude.... Obamacare subsidies average a little over $6k a year per enrollee (so say $13k for a couple) but Medicaid long-term care benefits cost taxpayers about $74k a year. The average nursing home stay is 835 days so at $203/day that is $170k that taxpayers are subsidizing families to transfer assets to their kids for those who do Medicaid LTC planning.

The CBO's latest projections from earlier this year show government paying out an average of $6,300 annually for every subsidized enrollee in fiscal 2018.

In 2018, the nationwide average private payer paid $257 per day for nursing home care while Medicaid paid approximately $203 per day.

Secondly, and I concede that this argument may ring hollow for some, but Obamacare subsidies are technically tax credits for taxpayers whose income is low and it is well established case law that it is fine to arrange your financial affairs to minimize taxes, to wit:

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
~ Judge Learned Hand
(1872-1961), Judge, U. S. Court of Appeals
in the case of Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934), aff'd, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)

And for the record, while I arrange my finances for tax advantage, I have never received premium tax credits and would never engage in Medicaid LTC planning... we will pay for our own care as long as we have resources and if we run out of money then our heirs will bear the impact.

 

[daylatedollarshort]

Didn't know there were rules on where I should post


Please advise on what else I should or should not be doing


Thanks!

I think it is a good idea to post questions multiple forums and analyze all the different answers. I'm not on city-data so if you had a question I could contribute an answer to I wouldn't see it there. (I don't on Medicaid planning except that I bought a book on the basics. But laws change so we would probably go elder law attorney route when the time gets closer for us.) I plan to do as much Medicaid planning as possible while also enjoying my $28K in tax credits for an ACA plan next year.

 

[Rushmore]

Where I live Medicaid and self pay are the same facility. So, it wouldn’t make any differnce