Giving Stuff To Your Kids Could Leave You Broke, Sick, And On The Street

Trust me – I’ve seen it happen.

I recently met with a couple in which the wife needed long-term care. They told me they had given financial help to their divorced daughter. When I told them their gifts were going to cause them severe penalties now that the wife needed care, they were devastated.

In fact, the Deficit Reduction Act of 2006 (DRA) has caused devastation for a lot of senior couples.

Imagine a healthy senior couple who had given $10,000 to a grandchild, say, for a semester overseas. Totally innocent, and very sweet, right? Well, the DRA doesn’t see it that way. They tend to believe that money is given away in order to qualify for Medicaid. So if either Grandpa or Grandpa apply for Medicaid during the next five years, their Uncle Sam is going to ask why they gave money away. And if this not-so-kindly uncle sees that they’ve given away more than $500, he’ll figure out a penalty period during which they won’t be eligible for benefits.

The gift to their grandchild is attributed to both ¬†Grandma and Grandpa – no matter who actually signed the check. And their “crime” could be punishable as long as five years later!

I call this the “Medicaid time-bomb.” A gift that you gave out of love could come back to haunt you five years later. And, even though you may now need long-term care, and may not have the money to pay for it…that’s not the government’s problem. You’re on your own.

In this imaginary case, the gift was $10,000. The State of Florida figures long-term care costs us about $5,000 a month. So Medicaid will not pay benefits for the first two months.

The moral? Don’t even think about applying for Medicaid without seeing an Elder Law attorney who specializes in long-term care benefits and estate planning! At The Law Offices of Alice Reiter Feld & Associates, we’ve succeeded in reducing the penalty period for many of our clients – and, in some cases, even getting it dismissed.

Over the last 33 years, we’ve helped thousands of South Florida families ensure that their loved ones are not broke, sick, and on the street!

And we’re just a phone call away.

Giving Stuff To Your Kids Could Leave You Broke, Sick, And On The Street

Posted in Alice Reiter Feld Florida Elder Law Monday Memos

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