"Gifting"

I strongly recommend talking with an attorney before moving into an assisted living facility (or an independent living facility or nursing home). Meeting with such a person is only part of the battle, however. It is also important to listen and take advice.

When my mother-in-law moved into such a facility, she had to sell her house to pay for it. Her attorney told her that she should gift out the money, and could do a certain amount each year. By doing this, it would get the money out of her name, which would help in terms of taxes as well as getting assistance to pay monthly expenses.

I understand the difficulty people have in doing this, although I am not sure my wife does, and this has led to more conflict between my mother-in-law and my wife. By gifting out the money, you now need to ask in order to get it back, someone else is in charge of, at least part, of your money. That is not an easy thing for anyone to do and especially difficult for someone who kept the books for other people.

My mother-in-law refused to gift out the money. When taxes where done this past year, they hit worse than expected because of liquidating some of the IRA’s and not having gifted out any money. Now, understanding she has only limited funds available to pay for the assisted living program, that will only last her a few years, she was willing (or at least said she was) to gift out some money.

My wife was in touch with the attorney who recommended she do this years ago. Now we find out from this attorney that the laws when it comes to gifting have changed and it may not be the best option. What has not changed is they still look back three years to see what was in your name then but is not now, hence it would have been beneficial to do this shortly after she suffered her stroke because the money would have been out of her name for three years and when they look back, it would have been free and clear of the timeframe.

My wife has a meeting with the attorney to see what, if anything, can now be done. I realize it is difficult to make such decisions but it is much worse to let pride get in the way and stop you from being able to help yourself.