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QUESTION: My aunt and uncle are going to a nursing home soon.
Both are old and at the point where they need nursing home care. They have
substantial assets (I don't have a number). I know that there's a 5 year
lookback for gifting and accept that. There's probably enough income from
their assets to cover the nursing home without touching their nest egg, but
I am not yet sure of this. ANyway, that's not relevant to my question.
My question is can they still gift $10,000 per person per year like the IRS
rule or will this $10,000 per person per year be considered during the
"lookback"? I would bet you can't do it (and qualify for Medicaid until
that $10,000 is accounted for as "spendable") but want to be sure that they
are not missing an opportunity to pass even small amounts of money legally.
ANSWER: >I know that this is slightly off topic, but I think it's close enough that
>it will pass muster. My aunt and uncle are going to a nursing home soon.
>Both are old and at the point where they need nursing home care. They have
>substantial assets (I don't have a number). I know that there's a 5 year
>lookback
Are you sure it is 5 and not 3 years?
> for gifting and accept that. There's probably enough income from
>their assets to cover the nursing home without touching their nest egg, but
>I am not yet sure of this. ANyway, that's not relevant to my question.
>My question is can they still gift $10,000 per person per year like the IRS
>rule or will this $10,000 per person per year be considered during the
>"lookback"?
Sure it is part of the lookback. Further, if they themselves do
not make the gift, but the gift is made by someone with their
durable Power of Attorney, be quite sure the POA explicitly grants
the power to make gifts to anyone including the person exercising
the power, and be sure state law permits this.
>I would bet you can't do it (and qualify for Medicaid until
>that $10,000 is accounted for as "spendable") but want to be sure that they
>are not missing an opportunity to pass even small amounts of money legally.
Part of what should be done now is to prepay funeral expenses and
burial plots, and be sure the contracts for thee are not
cancelable.
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