Mom has been helping her kids all their lives. She isn’t wealthy by any means, but she has enjoyed being generous with them.
And one of the kids really has needed help. Her daughter has a drinking problem and has not had a real job in years. So, Mom has paid her rent, bought her groceries and gas. She’s kept her daughter afloat. Ultimately, not a good way to make the daughter independent, but Mom felt she had to help.
Now, though, there is a problem. Mom’s health is failing, she can’t live at home anymore, and her savings are nearly depleted. She doesn’t want to move in with her kids. They may not be able to take care of her anyway, since they have their own jobs. She probably needs to move to a nursing home. But Mom’s monthly income is way less than the $7,000-$8,000 that a nursing home will cost. After a short while in a nursing home she’ll be broke. What happens then?
We in the US have a system to help people like Mom. It’s Medicaid. The problem is that Mom won’t be eligible for Medicaid when she needs it because of the gifts she made to her daughter. There will be a penalty period based on how much she gave her daughter during which she can’t receive benefits.
So, what are Mom’s options?
The daughter whom Mom has been helping of course has no money to help. The other kids can perhaps pay for Mom’s nursing home (although none of them is wealthy). And how will they feel about having to pay because of the gifts to their sister? Doesn’t sound like the makings for good family relations. Or Mom can move in with one of the kids – if they can take care of her.
What a sad situation for Mom and her family.
I think you can see where I’m going with this.
This did not need to happen. Don’t let it happen to your family! You have options.
Yes, if a family has not done any long-term care planning, making gifts to family members may disqualify mom and dad from getting help with long-term care expenses when they really need it.
However, with proper planning, mom and dad can make gifts to family members and still get the help they need when they need it – without having to exhaust all their estate.
But only if you plan ahead.