Should parents put children on joint account to protect assets from Medicaid?

[MULTIZ321]

Should parents put children on joint account to protect assets from Medicaid?

Should parents put children on joint account to protect assets from Medicaid?

Shifting assets to prepare for Medicaid isn't a simple act.

www.lehighvalleylive.com

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I think the gifting to the tro daughters should read $30,000 not $60,000 unless I'm missing something.


Richard

 

[VacationForever]

Should parents put children on joint account to protect assets from Medicaid?

Should parents put children on joint account to protect assets from Medicaid?

Shifting assets to prepare for Medicaid isn't a simple act.

www.lehighvalleylive.com

.

I think the gifting to the tro daughters should read $30,000 not $60,000 unless I'm missing something.


Richard

Each parent can give $15K each, 2 parents can gift up to $30K per child, total $60K for 2 children.

 

[MULTIZ321]

Each parent can give $15K each, 2 parents can gift up to $30K per child, total $60K for 2 children.

Thanks for the clarification.

Richard

 

[VacationForever]

The issue on hand is that the parents intend to make use of Medicaid. Living in a Medicaid nursing home in the last few years of life is the pits. If the intention is passing money onto children where Medicaid does not come into play, then it is better to leave the parents names in the accounts. The cost basis of any investments is stepped up to the date of when the parents pass away.

 

[bogey21]

I don't know how the Government would ever figure out my accounts. They have been JRWROS with my kids and ex-wife for over 20 years. Dollars go in. Dollars go out. Which deposits would be considered gifts? How about the withdrawals? If they were used for the benefit of my kids and/or ex-wife, would they be consider a return of the phantom gift. This is nuts...

George

 

[Panina]

If you put your money in a joint account with your children and your children are the ones who end up needing Medicaid, all that money will be considered your child's for their care. Plus if they have financial problems or a divorce that money can be in jeopardy too.

 

[PigsDad]

If you put your money in a joint account with your children and your children are the ones who end up needing Medicaid, all that money will be considered your child's for their care. Plus if they have financial problems or a divorce that money can be in jeopardy too.

Or if your child is sued for some reason, lawyers could go after all joint assets. That alone would make me pause before doing anything like this.

Kurt

 

[pittle]

The 5 year look-back period is key. You can not give your children money so that you can qualify for medicaid. The money given to them within the past 5 years creates a penalty for the parents, so that they cannot receive medicaid for a specific time or amount.

 

[VacationForever]

People seeking such method to have Medicaid pick up the tab is wrong anyway. That is hiding money so that taxpayers will pick up the tab.

 

[simpsontruckdriver]

The best option is (and has been discussed elsewhere) a long-term nursing care insurance plan. I do not sell them, nor do I know much about them, but in theory, they will help protect the parent(s) from having to liquidate assets if they need to be placed in a nursing home. As others have said, going on Medicaid in a nursing home is not the best option. Forget the stuff about being "wards of the state", just know that they may get lesser care than someone on LTC. I mean, LTC pays the nursing home what the nursing home needs, while Medicaid pays what they think they should be paid.

TS

 

[Bunk]

Don't mix up IRS rules and Medicaid Rules. The article suggests doing something that may not be smart medicaid planning.

The Internal Revenue Code allows a transfer of $15K per person to be made each year without having any Gift Tax implications. So two parents can transfer $60K to 2 children ($15 K per parent to each of the 2 children) with no gift tax issues.

Medicaid transfers are totally different and have nothing to do with gift tax. In New York at least, joint accounts can affect Medicaid eligibility. When a person applies for Medicaid long-term care coverage, the state looks at the applicant's assets to see if the applicant qualifies for assistance. While a joint account may have two names on it, most states assume the applicant owns the entire amount in the account regardless of who contributed money to the account. If your name is on a joint account and you enter a nursing home, the state will assume the assets in the account belong to you unless you can prove that you did not contribute to it. The eligibility rules for home health care (as opposed to nursing home) are often different.

 

[Panina]

The best option is (and has been discussed elsewhere) a long-term nursing care insurance plan. I do not sell them, nor do I know much about them, but in theory, they will help protect the parent(s) from having to liquidate assets if they need to be placed in a nursing home. As others have said, going on Medicaid in a nursing home is not the best option. Forget the stuff about being "wards of the state", just know that they may get lesser care than someone on LTC. I mean, LTC pays the nursing home what the nursing home needs, while Medicaid pays what they think they should be paid.

TS

My dad was in a nursing home. I can say whether Medicaid, LTC or self paid everyone got the same care.

 

[Panina]

Don't mix up IRS rules and Medicaid Rules. The article suggests doing something that may not be smart medicaid planning.

The Internal Revenue Code allows a transfer of $15K per person to be made each year without having any Gift Tax implications. So two parents can transfer $60K to 2 children ($15 K per parent to each of the 2 children) with no gift tax issues.

Medicaid transfers are totally different and have nothing to do with gift tax. In New York at least, joint accounts can affect Medicaid eligibility. When a person applies for Medicaid long-term care coverage, the state looks at the applicant's assets to see if the applicant qualifies for assistance. While a joint account may have two names on it, most states assume the applicant owns the entire amount in the account regardless of who contributed money to the account. If your name is on a joint account and you enter a nursing home, the state will assume the assets in the account belong to you unless you can prove that you did not contribute to it. The eligibility rules for home health care (as opposed to nursing home) are often different.

In NY for Medicaid, I don’t know about other states, if you gave the 15k gift, the state considers that in the equation, 5 years back, as money you need to pay down in a nursing home prior to getting Medicaid to pay for it.

 

[Bunk]

In NY for Medicaid, I don’t know about other states, if you gave the 15k gift, the state considers that in the equation, 5 years back, as money you need to pay down in a nursing home prior to getting Medicaid to pay for it.

Your are correct Panina: A gift made more than 5 years ago no longer affects medicaid eligibility in NYS under the current rules. But a joint account is different, because that remains an asset of the applicant.

 

[Panina]

Your are correct Panina: A gift made more than 5 years ago no longer affects medicaid eligibility in NYS under the current rules. But a joint account is different, because that remains an asset of the applicant.

Yes correct, A joint account in NYS is always assumed to be the applicants assets 100% for Medicaid.

 

[bogey21]

Or if your child is sued for some reason, lawyers could go after all joint assets. That alone would make me pause before doing anything like this.

I try to protect from this in two ways. First, one Account in JTWROS with Son, another with Daughter and the third with my Ex-Wife. Second, when any of the accounts start getting too large, I spend them down using most of the money for the benefit of my Co-Owner...

George

 

[bogey21]

People seeking such method to have Medicaid pick up the tab is wrong anyway. That is hiding money so that taxpayers will pick up the tab.

Understand that I don't agree with doing this but my understanding is that it is exactly what many Financial Planners advise...

George

 

[Brett]

My dad was in a nursing home. I can say whether Medicaid, LTC or self paid everyone got the same care.

My mother is currently in a nursing home and my wife once worked part-time for different nursing homes - some very high-end facilities and others that only accepted Medicaid recipients.
Everyone didn't get the same care, Big difference in physical arrangements, dining, community activities and hands-on physical and nursing assistance.

 

[Panina]

My mother is currently in a nursing home and my wife once worked part-time for different nursing homes - some very high-end facilities and others that only accepted Medicaid recipients.
Everyone didn't get the same care, Big difference in physical arrangements, dining, community activities and hands-on physical and nursing assistance.

My dad was in a higher end one and some beds were Medicaid, all people in the facility were treated the same.

If one facility is private only and another Medicaid only I can understand the difference.

I know when I visited all the nursing homes there was a tremendous difference between them.

 

[Brett]

My dad was in a higher end one and some beds were Medicaid, all people in the facility were treated the same.

If one facility is private only and another Medicaid only I can understand the difference.

I know when I visited all the nursing homes there was a tremendous difference between them.

We never saw that (High-end assisted living facility with medicaid recipients )
but I suppose it depends on each state's eligibility requirements and how much they reimburse the facility