Top Ten Mistakes Alabama Seniors Make With Estate Planning That Can Be Easily Avoided
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My 78 year old father in law is selling his home and moving into an assisted living apartment. He wants to gift some of the proceeds from the sale of the home to his children. It will be under $14,000 per each child. Is he able to do this with no repercussions from the state (to the children) if he HAS to go into a nursing home in the next five years?
The under $14,000 has to do with gift taxes.
Completely separate and unrelated to Alabama Medicaid.
Medicaid will view those as gifts. This is where we see a lot of financial professionals make mistakes. They assume (reasonably I might add) that if the IRS says “No problem with gifts under $14,000” that Medicaid must do the same.
It does not.
Now it is not illegal to give away assets but your father in law simply needs to have a plan in place. If he has to go into nursing home, how will he pay for it?
How much is he giving away? What will that penalty period be?
You might want to read these articles — penalty number in Alabama, the 60 month look back period, and the overall discussion of Alabama Medicaid.
Hope this helps and let us know if any other questions thanks!