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?
Living expense Trust could help even pay for a trip for her to visit family, hairdresser, car, gas, as well as TP, and things food stamps won't cover.
Your Aunt should control the trust and have specific instructions for who is Trustee if she dies or is unable...and how funds can be spent.
I know this as I once worked with an insurance company that set up such trusts, usually via an annuity, for clients with children with disabilities that would require lifelong care, or assistance to obtain some Independence.
It must be disclosed, but if set up proper you may lose some benefit funds, but not all. Call around and ask about fees. Some organizions charge very little, but get the balance when your Mom passes. So do your research.
Again there is a legal way to help provide for your Mom. Perhaps part of the funds could pay for quality Long Term Care Insurance. Then Medicaid Claw Back at her death is not a big issue. You need someone with experience...so ask how many they have done for people in your Mom's situation.
Also call DHS and find out at what $ point you have to report changes to income...or others/trust paying expenses. Also max amount at which point she loses benefits.
How much is car worth? Paying it off nay put her over benefit limit. Maybe Aunt should buy it or give you $ to buy it & maintain it.
I keep max earnings calculation for extra help & food stamps on paper inside my kitchen cabinet, for easy reference.
IA states it on each renewal or benefits change. IL did not! You may need an advocate from Center on Aging or State Representative's office.
Agencies are often paranoid about fraud attempts...or don't know how to calculate without letting their computer do it. Be persistent. Do it properly.
You might lose some benefits briefly, have a spend down amount each month, using $ from trust for medical costs...and document it!!! More critical is not losing housing benefits! Hard to get those back!
If she sells the car to the Aunt, who insures it and let's you use it, that is ok, so long as profit off car keeps assett under $2000. Note: Selling price should be in reasonable range. Look up what a dealer would pay and print it out. Selling to family is considered "an arms length deal" and may trigger Medicaid to Claw Back...require Medicaid be paid amount of the difference between actual value and sweetheart deal to a close family member..since tax payers are still paying Mom's Medical.
Again, know the rules and follow them. Otherwise now, or when a major expense hits, like nursing home, or after her death, the Claw Back bill will come due, and you won't have $$ to pay it.
It's worth the couple hundred dollars to get professional advice.
Check about that handwritten will because that is a holographic will & does not need to be notarized or witnessed but must be 100% in the person's handwriting & not typed/printed off in any way - so check where grandfather lived what the law is & how it is written but if he had auntie on those accounts then they are hers
Not once has OP asked a question about his mother’s health needs or sought info about hands on care or coping with living with an elderly person.
His mother is 65 & lives independently. 65 is hardly elderly, IMO.