We’ve all heard that it is better to give than it is to receive, right? Many people have been known to help a child or grandchild by giving them a large amount of money to start a nest egg or to get them started in life. While they may feel like they are doing a good deed, they may, in fact, be hurting themselves in the long run.
So how is this possible?
The government has a problem with people cheating the system. They feel that if you know you are sick and are trying to keep your money, you might give it to a relative for safe keeping. They don’t want you to do this and then ask to be put on Medicaid. If you give your children a “gift” of your house and $50,000 a year before you go into a nursing home, they are going to question your intentions.
Now, if you give small amounts of money to your children, your church, or other charities every year, they won’t think twice about this. More than $2000 in one year to a specific source, they will question for up to five years prior to you needing Medicaid.
This does not necessarily mean you are a target for the government’s scrutiny should you give money or your assets away, but you want to consider the potential of losing your Medicaid benefits should you need them.
By contacting an Elder Law firm, such as the Kabb Law, you will be able to find answers to some of the important questions that you may have about gifting. These may include:
• What does federal law allow you to gift to your children?
• What charities do not incur a penalty?
• What is the period of ineligibility in the state of Ohio for gifting?
• What of your assets can you gift without penalty?
As you age, it is important to protect your assets. Contact us at 216.991.KABB (5222).