How best to spend down assets so asto comply with Medicaid requirements?

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How best to spend down assets so asto comply with Medicaid requirements?

My uncle is 87 and lives alone; wife just passed. My brother and I are his heirs to everything he has (estate worth about $350,000). My brother is POA and refuses to let my uncle gift out his money. While my uncle is now healthy, my brother feels that eventually if our uncle goes into nursing home, Medicaid will question any activity done with the estate. He is willing to just let everything sit there and not try to spend it down. Uncle would like to give me $25,000 to help with our hardship. My brother says only with a written contract and payment plan will do, otherwise he’s afraid that Medicaid will take legal action againsthim. Should we speak with an elder law attorney? In Trumbull County, OH.

Asked on January 15, 2011 under Estate Planning, Ohio

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Yes, you should seek help from an estate planner in your area.  Your brother is somewhat correct that certaintransfers of assets within certain periods of time can be suspect and possibly set aside by Medicaid as fraudulent. But there are certain ways that money can be given during your lifetime that would indeed be legal.  For example, your Grandfather could give you and your brother a gift of I believe it is $13,000.00 tax free each year until he dies under Federal Laws.  This money would help you no doubt and not be suspect at all to Medicaid.  If your Uncle is of sound mind then he has a right to do with his money as he pleases. Good luck to you. 


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