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I keep hearing that if she has to go to nursing care in the future, we will be stuck paying however much she gave away. Not sure I understand that as it is her $$ to give.

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I agree with 97yroldmom. Even if the RM is a "done deal" it would be worth a consultation with an Elder Law attorney to see if she has any options for getting out of it, and to explain the Medicaid ramifications of giving money away, and also how to leave money to her grandchildren, if there is any left at the end of her life.
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Most folks apply for RM because they are in financial straights. There is a great deal to read on this site about RM and not much of it is good. Has your mom already applied? Has she received funds?
I would advise you as a loving child to visit a qualified elder attorney in your moms state and find out the best steps your mom can take to ensure she is well taken care of for her entire life given her personal situation. I'm pretty sure RM won't be on the list suggested by the attorney.
Her assets, I'm sure you would agree, should go to taking care of her. If she is so fortunate as to be able to leave behind an inheritance, then I'm sure she could write her will in such a way as to where that could be passed to her grandchildren.
What many don't realize with a RM is that insurance policies must be upgraded and paid, the home must be kept in good repair, taxes must be paid, the interest rates are very high and the loan is for less than the full value of the home. Your mom might be better off to sell the home and downsize. If she is seeking a RM for any reason that allows her funds to give a grandchild she is probably doing it for the wrong reason.
Please visit a qualified elder attorney with her to allow her to explore all of her options and not this seemingly low hanging fruit that might just be poisonous.
It ended disastrously for my one FM who took a RM so I am biased. Read the many threads on this site on this subject to learn more.
I'm sure there are many reasons why this might seem to be a good solution to a problem. Expand your search. And we haven't even talked about medicaid.
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Any one can give anyone any amount of their money at any time. But there may be tax implications, and there are definitely Medicaid implications if that becomes an issue in the future. If Mom applies for Medicaid they will look at her financial records for the five years prior to the application. She would need to account for the reverse mortgage and well as other income received in that period. If that includes large gift amounts (not $20 in a birthday card) that will incur a penalty.

So it is her money and she can do with it what she likes, but unless she is absolutely sure she won't need to apply for Medicaid in the next five years, she would be wise not to give substantial gifts.

(When I was working it was my money I earned. But, boy, would I be in trouble if I decided not to pay my taxes. Sure, your mother can do what she wants with her money, but some actions could really cause her grief down the road.)
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Yes, it's your Mother's money now. But it's not the taxpayer's problem to take care of her in the future. If she needs Medicaid, there is a 5 year look back rule to keep people from giving away their money and then getting the government to pay for their care. This is your Mother's situation. She should be saving her extra money for her future care.
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Sure, it's her money to give, but she can't then expect to be cared for through taxpayer funds via Medicaid.

I'm not sure what a reverse mortgage has to do with the situation. Are you saying that she'll be paying it off, will have extra funds and wants to gift it to the grandchildren? Sure, she can gift it to the grandchildren, but it will affect her ability, if any, to get Medicaid support.
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