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?
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.
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’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
what he wants. He wants her to be able to spend the money freely while being supported by government assistance.
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.
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.