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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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my mother has given out cash Christmas gifts to us children

Resolved Question:

my mother has given out cash Christmas gifts to us children for the past 40 years. They have been as:
given 100 dollars to each child,
50 to each grandchild,
20 for each great-grandchild.
she buys clothes (the kids go get them).
she buys candy, cookies, books, etc.
she's done this for the past 40 years.
can she continue to do this?
what else can she spend her money for without affecting her Medicaid qualification?
she receives social security, has the cds as we've discussed before, and has cash coming from the sale of her home.
all of the funds from her cds, cash from her home sale, and her social security will be spent on her nursing home care till she's broke, then she'll go on Medicaid. The question is.....what exactly may she spend from her existing revenue sources for Christmas cash gifts, shoes, clothes, candy, etc. without affecting her qualifications for Medicaid?? can she continue to give out the same cash gifts she has done for years for Christmas gifts, and what else can she spend her money on without affecting her Medicaid application when she's broke??
Thanks
Submitted: 3 years ago.
Category: Tax
Expert:  socrateaser replied 3 years ago.
Hello,

Expenses incurred in the ordinary course of business or for necessities of life are not considered in making Medicaid decisions. Nor are nominal gifts. The state's concern is that the participant is attempting to divest substantial assets to her heirs, and thereby effectively retain the estate, while receiving free benefits from the government.

A couple of thousand dollars worth of gifts is not likely to get any attention. If the total amount of gifts exceeds $5,000 during any year, someone is likely to take notice. Though, there is no absolute number -- I'm using $5,000 as a point where the cost of recovery may become less than the amount recovered.

Note: I just want to say that I empathize with your situation, because I have a parent in similar circumstances. End-of-life care is devastatingly expensive.

Hope this helps.

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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 33532
Experience: Retired (mostly)
socrateaser and 3 other Tax Specialists are ready to help you

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