Thanks in advance for your answers.
My grandfather passed around mid 2018. My aunt who he lived with and took care of him was the co-owner and beneficiary on all of his accounts so my understanding is that 100% of all his accounts default to her once he passed. There was no estate, trusts, or will ever set up. Supposedly he once wrote a hand written will but it was never notarized so it holds no legal value.
My mother is below poverty level and her only income is about $800 per month from social security.
My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like Medicaid, premium free Medicare part A & B, food stamps, and HUD subsidized housing.
In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?
My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.
Thoughts?
Is there any way in which possession of an $80K windfall could improve your mother's quality of life?
Ask your aunt why exactly she wants to hand this money to your mother. If she doesn't have a reason which works to your mother's benefit, perhaps it would be better if she didn't do it. It certainly sounds as if she earned her legacy.
Doesn’t appear you’ve taken that advice yet. It’s true when a poster below stated the answers are the same as the first time you asked. Oh, sorry, it’s not an inheritance.
You received really good responses last month. I’m thinking you want Igloo back here so you won’t have to “pay through your nose” for a lawyer as you figure out how to get around the system. Laws vary in each state. I’m surprised you’ve waited this long to speak to an attorney in your state that is well versed in the law in your mother’s area.
Before you listen to anyone giving you “zero value” responses, why haven’t you contacted an attorney or at least paid for a consult?
How will you improve your mother’s quality of life when you are missing the most important part - her health? Paying off her car will do that? You stated she refuses to go to any doctor for treatment & that she’s estranged from her sisters.
She is unhealthy and alone. Money won’t solve that.
You wouldn’t think to provide her with better housing with that money? All she would have to do is give up her benefits and reapply when the money is gone. At 65 she is eligible for Medicare anyway. So she’d give up Section 8 & Medicaid only. You yourself need that money to pay off her car? You cant afford to take that on for your mother?
I thought the CD was going to mature by the end of December thus your urgency last month.
I agree with CM - nothing stopping your aunt from gifting your mother that money. Nothing stopping her to gift it to you for you to spend it on your mother either.
what he wants. He wants her to be able to spend the money freely while being supported by government assistance.
You’ve rejected the trust because eventually the money in that trust would go back to Medicaid to pay for the benefits your mother received while she had a significant amount of money in the trust.
You’ve rejected annuities as the payout even at $300 a month would penalize her benefits and put her above the poverty level. If that’s what she wants, why not?
Have you asked your mother what she would like to do with the money? Is she involved in this decision? Not once have you mentioned what your mother might want.
And you are considering asking your aunt to “wire” the money into your account and you would then decide how your mother spends it? And then, merely “deducting” what you “think” the tax amount may be from the transfer. Who would file the tax forms for you, your aunt?
Seriously what gives you the right to decide for your mother? She’s only 65.
And you are calling us “hypocrites” as well. Geez louise.
I’ll still respond to some of your questions with hopes that you actually try to give guidance before throwing more jabs and judging me...
My mother was the first one to bring to my attention that ANY money she recieves will most likely cause her to lose benefits and that she wants me to look into her options which is what I am doing.
If my aunt wires money to me, she is the one that has to file tax returns for gifting however the way I understand it, she will not pay tax on gifting that money. Every dollar over 15k will go towards her live time gift exemption which is over 5 million
Also, my aunt has not paid tax on that money. She was a co-owner on his bank accounts. The moment he passes she goes on to be sole owner of those accounts and I do not believe she is subject to taxation in this instance.
I could be incorrect but this is the info to the best of my knowledge.
You also feel that keeping your mom on public assistance is paid in full by your taxes, if that is true, why not take her in and claim her as a dependent? You would save on your taxes and be able to accept the gift from you aunt without defrauding the system.
You jump on others about judging you and turn right around and judge them, saying if the shoe was on the other foot, we too would be looking at how to commit fraud. Then you criticize people that are caregiving for their loved one for using a forum that was created for that very thing, not how to pilfer the system. This obviously angers you, well, it straight out pisces me off when people use the system and I see children going to bed hungry or living in a shelter because there are no resources available to help their families get back on there feet. I don't know, maybe you all are proud that grandpa amassed a fortune while the taxpayers support his daughter, maybe all of his children, who knows. I don't think I would brag if I was in your shoes.
You asked a poster if they were threatening you, let me say, I don't think it was a threat, I think it was a promise and I'll sign that petition. Get the deadbeats that are abusing the system off welfare.
You should encourage your aunt to do the RIGHT thing, set up a trust that doesn't allow your mom to touch the money but pays her monthly bills, invested properly she could live years without collecting another penny of welfare. When that money is gone she can reapply for the services she is receiving.
You can call it anything you like, but it is fraud and it is criminal, just don't go there. Stay on the right side of the law. You'll feel better knowing that a child will get a home because your moms circumstances improved and created an opening of public assistance.
Please stop. Special needs trusts is one very common and legal way to accomplish what I want to accomplish. It is unfair for you to continue to insist that what I am suggesting is wrong, when the government has specifically set up a procedure where someone can do just what I want to accomplish. “If the shoe was on the other foot...” you too would be exploring this option (NOT “looking how to commit fraud or pilfer the system” as you try to put words in my mouth).
Once again, there are special government approved vehicles for allowing just this sort of transfer of funds (the aforementioned special needs trust). If someone wants to gift small amounts to mom in a way that won't jeopardize her benefits, then so be it. This is a lot like the difference between tax avoidance and tax evasion. Avoidance is legal, evasion isn't.
The fact that it's legal is really all that matters. That may rub you the wrong way and piss you off but you’ll be ok. I promise. By the way, I hope you calling my mother a deadbeat makes you feel better about yourself.
Posters have advised you to see an elder attorney numerous times throughout this thread and your previous one in mid-December. Why haven't you done so?
Next time this poster - or anyone like this poster - asks our forum about how to stay on welfare while benefiting from a financial windfall, I hope someone will hit the report button.
Happy New Year to all the hardworking, honest, and selfless caregivers. Peace.
What I am trying to accomplish is not fraud and that’s why there are legal vehicles for these type of situations that I am trying to learn more about. The fact that you do not like this reality does not give you the right to accuse people of commiting fraud while mocking them just because they are not a caregiver in your eyes.
You publicly make false accusations instead contributing usefull information to the thread. That sounds more like something that should be reported to the forum in my eyes.
When someone is asking how to get 80k for a welfare recipient to improve the quality of life without loosing the taxpayers aid they receive is fraud. You can cut that pie any direction you want but it still slices to the same fraud. If it wasn't, you would accept the gift, file your taxes and report it to whomever welfare recipients report to. You would not filter it through someone so it didn't show up as an asset for you, even though it is.
Maybe you have never experienced a hungry child because their parents make to much money to get aid, even though dad only makes minimum wage and mom can't find affordable daycare so she stays home to raise her child, but then is faced with options to buy food or pay the power bill. Its called the working poor. You are very blessed that you have never seen that kind of heartbreak, but it happens everyday in many households in the USA and people that take advantage of the system help create that situation, so when someone wants to travel and have a car paid for and not pay their own way, it is criminal. People work multiple jobs and don't have what this woman has, am I and a few others the only ones that think something is very wrong with that.
If you are a real estate developer in New York City and you pay taxes, you need to fire your accountant. Mr. Trump was correct in the debate. Mrs. Clinton was a senator for years and proposed exactly no laws requiring that more taxes be paid by people like Mr. Trump. And we are all fine with that. And we're snarling at people who are just asking what they should do to protect the little bit of assets they have.
If you are truly worried about the working poor pay attention to how wealth is being distributed in this country. We shouldn't be fighting with each other over the crumbs we're being left.
DO WHATEVER it takes to NOT lose those benefits she already has and yes there are work arounds. I know nothing about taxes.
Hopefully aunt’s attorneys will work with aunt to provide for her sister legally & will not jeopardize her benefits even though any gift given to mom will affect Medicaid.
This is all conjecture- it’s Elmo’s playing against the attorneys now - his aunt’s attorneys - and I will bet it won’t materialize as attorneys won’t jeopardize their law license recommending something illegal.
I am not going to judge the situation. IF you do things legally (whether or not they are morally correct or others approve) you have the law on your side.
Your aunt would be the legal owner of whatever was in your grandfathers' AND HER account. She CO-OWNED it. She would not need to pay any inheritance taxes because it was hers in the first place.
Your mother, (your aunts sister) has income below poverty level. She is on public assistance and being supported by the government (tax payers).
You want to "shelter" the money for her (so she doesn't loose her gov benefits) but spend it to improve her life. Life is not easy on GA and there is often not enough money to pay for everything.
Well, you can't change her apartment (which would be subsidized by the gov), or else she'll loose the benefit.
You can't pay off the car or else it will be considered a "gift" and benefits would be reduced or stopped. I suppose you could pay the payment each month and have it slip under the gov radar. She could then save the amount of the car payment. (That is cheating.)
You could upgrade her furniture. I wouldn't think gov Social Service workers go to the house.
You could supplement the meager amount of food she's able to get on food stamps, so at least she could eat like a queen.
I would imagine you could give her wardrobe a boost with a few new clothes but no fancy name brands that would attract attention.
So, really, what can "better her life" without blowing her benefits? It doesn't really matter WHO gives her the money (you or auntie), she can only accept what is legal.
Since your mom is collecting SS ($800.) could you figure out how much the gov is subsidizing, then figure out how long 80K would last. (for example gov pays $1000. in subsidies/month, the 80K would last 6 years 8 months) She could live well for that long or continue on gov benefits with you supplying what she desires.
With the exception of the Special Needs Trust, I don't see a (legal) way out. I'm sure an elder attorney would have more knowledge in these matters.
Fancy clothing is not something she cares about. She likes clothing from Kohls and is as happy as a child in a candy store with that place.
No need to upgrade furniture in her apartment. Not sure if you have seen what a subsidized 1 bedroom studio looks like.
Bottom line- her subsidized housing is only partially subsidized; she still pays monthly rent over $200. Her medicaid and medicare free premium gives us the benefit of doubt that she is covered from a health perspective although she is not the best about going to the doctor. Her food stamps is about $100 per month. You do the numbers on that one. “Eating like a queen” is not the goal here.
The $800 in traditional SS retirement she recieves is not making ends meet which is why she embarrassingly asks me or my sister for cash every month just to get by before the next SS check comes in.
Improving her quality of life right now is her getting to the end of the month not worrying about asking my sister for “gas money”.
Could she get off benefits, then use 80k to live the same lifestyle that she lives now and then reapply for government benefits again once the money is gone? Sure she can. Then she is right back to the same or worse circumstances then she is now. Most likely worse due to inflation. Her $800 per month will buy less.
Would I prefer that the 80k be a supplement to make ends meet every month for as long as we can make it last? Yes and this if I can accomplish that while abiding by the law, that is what we are going to do regardless of how many people that bothers on an online forum.
Why not give your Aunt the information on what needs to be paid off and she can do that directly so you do not get the money at all. (and while she/you are at it my house needs a few repairs as well...kidding)
Yes proper planning is. Needed to care for our loved ones. One need to do 10 years ahead. Plan 60 on these details.
By the way, a hand-written will is still valid even if not notarized or witnessed, although in your aunt's case, since all your grandfather's assets passed to her outside of probate (as jointly titled accounts), the will would have no effect in any case.
Doesn’t the legality of a non-notarized/non-witness will vary by state?
I know this doesn't apply to us because my aunt was joint owner on his accounts. But thought I would ask anyway. Thanks
It's a pretty good article and may help in some way. Good luck!
My nephew has been disabled from birth. His mother passed and left an insurance policy. When he filed for SSD, we were told by Social Services to obtain a Special Needs Trust to protect the 50k. The lawyer cost 5k, which we were allowed to use the insurance money for. It was to take a year but there was a glitch and it took two. Primarily, the only thing I can use this trust for is his care when and if needed. Things that aren't covered by Medicaid or Medicare. The lawyer had to file with the County Court and their was a hearing with a Judge. My nephew was present. The Judge had to OK the trust. So, its not something that is automatic. And if Elmo's Mom is past the age of 65, she can't apply for one. Age related disabilities are not covered by a Special Needs Trust. As it says its for people with Special Needs. Like Downs Syndrome, Cerebral Palsy, etc.
Good Luck Elmo and get back to us in how it all turns out. We may learn something we didn't know.