The Danger Of Making Holiday Gifts When It Comes To Long-Term Care Planning

The Danger Of Making Holiday Gifts When It Comes To Long-Term Care Planning

‘Tis the season to give and receive, but did you know that this can have significant consequences if you need to apply for Medicaid in the next three to five years? Can gifts impact Medicaid eligibility? Yes, this can have impacts for both the giver and receiver.

 Regarding the gift giver, it should be noted that the IRS allows a tax-free annual gift of fifteen thousand dollars per person with an unlimited amount of donees. In other words, a wealthy donor could gift away over a million tax free dollars per year by gifting a hundred different people the maximum fifteen thousand dollars.

 It can be vital, however, to understand these are tax laws and Medicaid takes a different stance on gifting in terms of Medicaid eligibility. When a person’s assets are reviewed for Medicaid eligibility, this includes a “Look-Back” period of thirty to sixty months, depending upon the state. If it is discovered that the Medicaid applicant has gifted money in order to be eligible for Medicaid, the penalty is Medicaid ineligibility. The length of time of ineligibility is determined by the amount of the gift and the average cost of a private pay nursing home in the area.

 A person deemed ineligible for Medicaid due to gift giving has some options. It is possible for the gifter to collect the gift back, or reimbursement, in order to “un-do” the penalty. Even if possession of the money makes them ineligible for Medicaid, they can spend it down by temporarily paying for long-term care or making a home modification related to their disability until they reach eligibility status. There may also be a possibility of an undue hardship waiver, if Medicaid ineligibility will cause the person to go without medical care, food or shelter.

There may also be important impacts on the gift receiver. All states have an asset limit to be Medicaid eligible and it is not very high. In fact, many states have limits falling in the range of fifteen hundred to two thousand dollars. Even a small gift can push a Medicaid recipient over the eligibility limit. Any gift received must be spent within a month in order to avoid affecting Medicaid eligibility. A Medicaid recipient has options if they receive a gift. They can pay off debt, purchase a funeral trust or a Medicaid eligible annuity. If money is received before applying for Medicaid, the money can also be spent down in a similar fashion. 

If you will be giving or receiving money or other assets this holiday season and anticipate this may impact your Medicaid eligibility or someone else’s, contact our office to discuss your options.

 

Caregiving Basics You Need to Know in the New Year

Caregiving Basics You Need to Know in the New Year

Every year, millions of American families face the difficult decision of how to help an aging parent who can no longer fully take care of himself or herself. For many families, the answer is to provide needed caregiving services themselves. While this seems like an easy solution at first, it is not.

There is much to know about caregiving, and several initial questions to consider, include:

Are you qualified to take care of an elder parent?

Some aging loved ones require assistance with meal preparation, bathing, and getting dressed. Others may need assistance taking medications and short trips to the doctor’s office. Florida seniors with serious health conditions or mental illness, however, may need professional care.

Are you financially prepared?

Caregiving is expensive, but there are ways to obtain financial support. Although most seniors expect Medicare to help cover the costs of aging, often it cannot.  Medicaid and veterans benefits, however, may be available as resources. Further, long-term care insurance, Social Security income, and various tax deductions for out-of-pocket expenses may also apply.

How will caregiving affect your emotional and mental health?

Providing care for elderly parents can be emotionally and mentally challenging, especially as loved ones continue to age and their health declines.

If you can affirmatively answer these questions, or are committed to developing healthy caregiving strategies, you may also want to consider:

Family caregivers can be paid. If an aging parent has the resources to pay for a family caregiver, there is no reason not to explore this possibility. The key is creating the right contract for your needs. Do not wait to meet with an experienced elder care attorney about this type of contract.

Sibling conflicts. Caregiving responsibilities usually fall on one adult-child family member more than any other. This often leads to sibling strife even in the most “functional” families, and especially over issues concerning money, fairness and important health decisions. Discuss ways to prevent these issues now, as things may get harder in the future.

Moving in. Nursing homes and assisted living facilities are expensive. One cost-effective option, however, is to have your aging parent move into your home. As long as your relationship is healthy, it can be a rewarding experience for all involved and provide much needed care.

Taking care of yourself. The demands of family caregiving can lead to burnout and poor health. Often, we find these problems stem from putting an elder parent’s needs before your own. As a caregiver, try not to avoid your needs in this setting.

With over thirteen million Americans currently caring for their children and parents, we know you may need guidance on how to balance these responsibilities. We know this article also may raise more questions than it answers. Do not wait to contact our office to discuss your needs, and those of your family, today.