Thanks in advance for your answers.
My grandfather passed around mid 2018. My aunt who he lived with and took care of him was the co-owner and beneficiary on all of his accounts so my understanding is that 100% of all his accounts default to her once he passed. There was no estate, trusts, or will ever set up. Supposedly he once wrote a hand written will but it was never notarized so it holds no legal value.
My mother is below poverty level and her only income is about $800 per month from social security.
My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like Medicaid, premium free Medicare part A & B, food stamps, and HUD subsidized housing.
In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?
My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.
Thoughts?
Not once has OP asked a question about his mother’s health needs or sought info about hands on care or coping with living with an elderly person.
His mother is 65 & lives independently. 65 is hardly elderly, IMO.
Check about that handwritten will because that is a holographic will & does not need to be notarized or witnessed but must be 100% in the person's handwriting & not typed/printed off in any way - so check where grandfather lived what the law is & how it is written but if he had auntie on those accounts then they are hers
It's worth the couple hundred dollars to get professional advice.
If she sells the car to the Aunt, who insures it and let's you use it, that is ok, so long as profit off car keeps assett under $2000. Note: Selling price should be in reasonable range. Look up what a dealer would pay and print it out. Selling to family is considered "an arms length deal" and may trigger Medicaid to Claw Back...require Medicaid be paid amount of the difference between actual value and sweetheart deal to a close family member..since tax payers are still paying Mom's Medical.
Again, know the rules and follow them. Otherwise now, or when a major expense hits, like nursing home, or after her death, the Claw Back bill will come due, and you won't have $$ to pay it.
Living expense Trust could help even pay for a trip for her to visit family, hairdresser, car, gas, as well as TP, and things food stamps won't cover.
Your Aunt should control the trust and have specific instructions for who is Trustee if she dies or is unable...and how funds can be spent.
I know this as I once worked with an insurance company that set up such trusts, usually via an annuity, for clients with children with disabilities that would require lifelong care, or assistance to obtain some Independence.
It must be disclosed, but if set up proper you may lose some benefit funds, but not all. Call around and ask about fees. Some organizions charge very little, but get the balance when your Mom passes. So do your research.
Again there is a legal way to help provide for your Mom. Perhaps part of the funds could pay for quality Long Term Care Insurance. Then Medicaid Claw Back at her death is not a big issue. You need someone with experience...so ask how many they have done for people in your Mom's situation.
Also call DHS and find out at what $ point you have to report changes to income...or others/trust paying expenses. Also max amount at which point she loses benefits.
How much is car worth? Paying it off nay put her over benefit limit. Maybe Aunt should buy it or give you $ to buy it & maintain it.
I keep max earnings calculation for extra help & food stamps on paper inside my kitchen cabinet, for easy reference.
IA states it on each renewal or benefits change. IL did not! You may need an advocate from Center on Aging or State Representative's office.
Agencies are often paranoid about fraud attempts...or don't know how to calculate without letting their computer do it. Be persistent. Do it properly.
You might lose some benefits briefly, have a spend down amount each month, using $ from trust for medical costs...and document it!!! More critical is not losing housing benefits! Hard to get those back!
Good Luck Elmo and get back to us in how it all turns out. We may learn something we didn't know.
My nephew has been disabled from birth. His mother passed and left an insurance policy. When he filed for SSD, we were told by Social Services to obtain a Special Needs Trust to protect the 50k. The lawyer cost 5k, which we were allowed to use the insurance money for. It was to take a year but there was a glitch and it took two. Primarily, the only thing I can use this trust for is his care when and if needed. Things that aren't covered by Medicaid or Medicare. The lawyer had to file with the County Court and their was a hearing with a Judge. My nephew was present. The Judge had to OK the trust. So, its not something that is automatic. And if Elmo's Mom is past the age of 65, she can't apply for one. Age related disabilities are not covered by a Special Needs Trust. As it says its for people with Special Needs. Like Downs Syndrome, Cerebral Palsy, etc.
It's a pretty good article and may help in some way. Good luck!
By the way, a hand-written will is still valid even if not notarized or witnessed, although in your aunt's case, since all your grandfather's assets passed to her outside of probate (as jointly titled accounts), the will would have no effect in any case.
Doesn’t the legality of a non-notarized/non-witness will vary by state?
I know this doesn't apply to us because my aunt was joint owner on his accounts. But thought I would ask anyway. Thanks
Yes proper planning is. Needed to care for our loved ones. One need to do 10 years ahead. Plan 60 on these details.
Why not give your Aunt the information on what needs to be paid off and she can do that directly so you do not get the money at all. (and while she/you are at it my house needs a few repairs as well...kidding)
I am not going to judge the situation. IF you do things legally (whether or not they are morally correct or others approve) you have the law on your side.
Your aunt would be the legal owner of whatever was in your grandfathers' AND HER account. She CO-OWNED it. She would not need to pay any inheritance taxes because it was hers in the first place.
Your mother, (your aunts sister) has income below poverty level. She is on public assistance and being supported by the government (tax payers).
You want to "shelter" the money for her (so she doesn't loose her gov benefits) but spend it to improve her life. Life is not easy on GA and there is often not enough money to pay for everything.
Well, you can't change her apartment (which would be subsidized by the gov), or else she'll loose the benefit.
You can't pay off the car or else it will be considered a "gift" and benefits would be reduced or stopped. I suppose you could pay the payment each month and have it slip under the gov radar. She could then save the amount of the car payment. (That is cheating.)
You could upgrade her furniture. I wouldn't think gov Social Service workers go to the house.
You could supplement the meager amount of food she's able to get on food stamps, so at least she could eat like a queen.
I would imagine you could give her wardrobe a boost with a few new clothes but no fancy name brands that would attract attention.
So, really, what can "better her life" without blowing her benefits? It doesn't really matter WHO gives her the money (you or auntie), she can only accept what is legal.
Since your mom is collecting SS ($800.) could you figure out how much the gov is subsidizing, then figure out how long 80K would last. (for example gov pays $1000. in subsidies/month, the 80K would last 6 years 8 months) She could live well for that long or continue on gov benefits with you supplying what she desires.
With the exception of the Special Needs Trust, I don't see a (legal) way out. I'm sure an elder attorney would have more knowledge in these matters.
Fancy clothing is not something she cares about. She likes clothing from Kohls and is as happy as a child in a candy store with that place.
No need to upgrade furniture in her apartment. Not sure if you have seen what a subsidized 1 bedroom studio looks like.
Bottom line- her subsidized housing is only partially subsidized; she still pays monthly rent over $200. Her medicaid and medicare free premium gives us the benefit of doubt that she is covered from a health perspective although she is not the best about going to the doctor. Her food stamps is about $100 per month. You do the numbers on that one. “Eating like a queen” is not the goal here.
The $800 in traditional SS retirement she recieves is not making ends meet which is why she embarrassingly asks me or my sister for cash every month just to get by before the next SS check comes in.
Improving her quality of life right now is her getting to the end of the month not worrying about asking my sister for “gas money”.
Could she get off benefits, then use 80k to live the same lifestyle that she lives now and then reapply for government benefits again once the money is gone? Sure she can. Then she is right back to the same or worse circumstances then she is now. Most likely worse due to inflation. Her $800 per month will buy less.
Would I prefer that the 80k be a supplement to make ends meet every month for as long as we can make it last? Yes and this if I can accomplish that while abiding by the law, that is what we are going to do regardless of how many people that bothers on an online forum.
Hopefully aunt’s attorneys will work with aunt to provide for her sister legally & will not jeopardize her benefits even though any gift given to mom will affect Medicaid.
This is all conjecture- it’s Elmo’s playing against the attorneys now - his aunt’s attorneys - and I will bet it won’t materialize as attorneys won’t jeopardize their law license recommending something illegal.
DO WHATEVER it takes to NOT lose those benefits she already has and yes there are work arounds. I know nothing about taxes.
When someone is asking how to get 80k for a welfare recipient to improve the quality of life without loosing the taxpayers aid they receive is fraud. You can cut that pie any direction you want but it still slices to the same fraud. If it wasn't, you would accept the gift, file your taxes and report it to whomever welfare recipients report to. You would not filter it through someone so it didn't show up as an asset for you, even though it is.
Maybe you have never experienced a hungry child because their parents make to much money to get aid, even though dad only makes minimum wage and mom can't find affordable daycare so she stays home to raise her child, but then is faced with options to buy food or pay the power bill. Its called the working poor. You are very blessed that you have never seen that kind of heartbreak, but it happens everyday in many households in the USA and people that take advantage of the system help create that situation, so when someone wants to travel and have a car paid for and not pay their own way, it is criminal. People work multiple jobs and don't have what this woman has, am I and a few others the only ones that think something is very wrong with that.
If you are a real estate developer in New York City and you pay taxes, you need to fire your accountant. Mr. Trump was correct in the debate. Mrs. Clinton was a senator for years and proposed exactly no laws requiring that more taxes be paid by people like Mr. Trump. And we are all fine with that. And we're snarling at people who are just asking what they should do to protect the little bit of assets they have.
If you are truly worried about the working poor pay attention to how wealth is being distributed in this country. We shouldn't be fighting with each other over the crumbs we're being left.
Next time this poster - or anyone like this poster - asks our forum about how to stay on welfare while benefiting from a financial windfall, I hope someone will hit the report button.
Happy New Year to all the hardworking, honest, and selfless caregivers. Peace.
What I am trying to accomplish is not fraud and that’s why there are legal vehicles for these type of situations that I am trying to learn more about. The fact that you do not like this reality does not give you the right to accuse people of commiting fraud while mocking them just because they are not a caregiver in your eyes.
You publicly make false accusations instead contributing usefull information to the thread. That sounds more like something that should be reported to the forum in my eyes.
Posters have advised you to see an elder attorney numerous times throughout this thread and your previous one in mid-December. Why haven't you done so?