Can MIL gift money

[Ombud]

She can gift 14k to you + 14k to your DH + 14k to your DD per year = 42k per year. That 100k won't last long

[mwcpa]

"Will they look at it as just trying to keep it from the state at this late date."

More than likely yes.... that is the purpose correct?

Be careful here..... more than likely there will be "no" tax due.... more than likely the entire $100,000 can be transferred today, free of gift tax.... but, more than likely, of MIL enters an assisted living facility and goes on the Medicaid rolls the government will attach the "gifts" you received.  They will allege that the transfer was made to evade Medicaid rules.

I strongly suggest that you meet with a qualified "elder care" attorney before you make any moves.  The attorney should be knowledgeable (and licensed) in the state that MIL resides.

[taxref]

MWCPA makes a very good point about the elder care attorney.  While a very important consideration is structuring her transactions to avoid running afoul of the medicaid lookback rules, there are other reasons as well.

Her refusal to see a doctor could very well be related to her dementia.  In such a case, a power of attorney for medical reasons could be very beneficial to her.  

A power of attorney would also be a good thing to seek for your own protection.  Its not uncommon to see families become divided at such times, and accuse those who are helping of stealing from the incompetent relative.  A proper power of attorney will help avoid (but not fully prevent) that.

[Pants]

"Is it possible for her to gift him $10k a year, she could me too I guess for the next 4 years. Will they look at it as just trying to keep it from the state at this late date. 1 year has passed already. I hate to see it all go to a nursing home and her on Medicaid anyway later."
 
So you want her money to not go for her care, but essentially to go to you instead? While having the government pay for her care?

This is WHY there are lookback rules.

[resolution]

The money should be used for her care before she goes into any sort of medicaid. If you know she needs to go into a nursing home, you might be able to use that money to get her into a better quality nursing home. Some of the nicer one's won't accept people that are on medicaid but if you go in as a paying customer will let you stay there if you transition to medicaid later.

Agree that you should see an elder care attorney or talk to your local Adult Services or Social Services to see what type of support is available for her Alzheimers.

[kittypuppymom]

Not a 100% sure on my facts, but I think she can write you check for $9999.99 and it does not get reported by the bank to the government. Double check me on that. Also she can give you up to $14,000.00 each.

[Deleted]

Oct 1, 2013 12:31:35 GMT -5 @anne81 said:

I'm confused - did your MIL gift you 100k a year ago?  If so I would think that you would owe taxes on the amount about 26k (13k for each and your husband).  I also think it would fall into the look back period of 5 years for medicaid, if I'm not mistaken.  Both of those scenarios would be a bummer if you intend on using the funds for your MIL's care like you did for your mother.

Not an accountant or a lawyer but I believe the only way you can gift that amount in one year and have it count for several years of gifts is through a trust or something like a 529. 

Second, third, and fourth speaking to someone about how to place the funds (joint account, etc.) so they are available for your MIL's care and not taxable to you.

You can gift much more than $13k a year tax free.    Her MIL could give away up to $5,120,000 before triggering any tax.    

[justme]

It's just that anything under $14k the gifter doesn't have to fill out some IRS form informing them about the gift. If it's over the $14k you fill out the form and that amount goes towards the max amount you can gift in your lifetime without a tax. (Give or take some more correct verbiage I don't know.)

[Deleted]

Oct 1, 2013 13:28:19 GMT -5 justme said:

It's just that anything under $14k the gifter doesn't have to fill out some IRS form informing them about the gift. If it's over the $14k you fill out the form and that amount goes towards the max amount you can gift in your lifetime without a tax. (Give or take some more correct verbiage I don't know.)

Yup.

[Peace77]

Does MIL have her burial/ funeral expenses paid for?  That is an allowable expense.

[Ombud]

Don't think of it as going down the drain. Think of it as paying for a better home than the overcrowded understaffed medicaid nursing homes

[Ombud]

Maybe CA is the only place where the acuity is significantly lower in non-medicaid homes

[TheOtherMe]

Had an aunt with Ahlzheimer's whose son was in denial about the fact that she should not be living alone.  She fell and was taken to hospital by ambulance.  Doctor would not release her back to her home.  She went straight to a nursing home, on Medicaid. She should have been there for years before it happened, may she rest in peace.