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Investing/Strategies / Retirement Investing
|Subject: Re: WISDOM PLEASE||Date: 6/6/2001 1:58 AM|
|Author: TTRoberts||Number: 30091 of 77871|
inthesonlite, you wrote:
<< HERE'S THE SITUATION, MY MOM IS 74 AND HER HEALTH IS NOT THE GREATEST SHE HAS 23,000 INVESTED IN CD'S PAYING ROUGHLY 5.5%. WE WANT TO PROTECT THIS FROM GOING TO A NURSING HOME SHOULD SHE NEED TO GO TO ONE IN THE FUTURE. SHE WAS GOING TO GIVE IT TO ME TO INVEST IN AN VARIABLE ANNUITY WHERE I WILL DRAW $200.00 PER MONTH AND SEND IT TO HER, JUST LIKE SHE WAS DOING WITH HER CD'S.THIS WOULD NOT BE THE FIXED MONTHLY PAYMENT TYPE ANNUITY WHERE IT'S A SET MONTHLY PAYMENT,THIS WOULD BE A WITHDRAWL OF THE INTEREST THAT IT HOPEFULLY IS EARNING.
MY QUESTIONS ARE HOW WILL THIS EFFECT MY TAX SITUATION, BECAUSE THE ANNUITY WILL BE IN MY NAME AND THOSE $200.00 WITHDRAWLS WILL APPEAR TO THE IRS AS MY INCOME. ALSO IS THERE A BETTER INVESTMENT I COULD MAKE?? MY MOTHER ISN'T COMFORTABLE WITH MUCH RISK AND THIS IS REALLY HER MONEY THAT I AM BEING A STEWARD OF, HOWEVER I THINK SHE COULD DO BETTER INTEREST WISE,THAN THE CD'S SHE CUURENTLY HAS.
IF IT MATTERS WE LIVE IN FLORIDA. MOM HAS NO LIFE INSURANCE AND NO ESTATE TO SPEAK OF AND I AM THE ONLY CHILD. >>
There can be a 3 to 5 year look back for Medicaid benefits - meaning, if your Mom does have to go to a nursing home or some assisted living home within this period, she will be required to spend down all she has but about $2,000 (you'll have to check to see what Florida has for a look back period). If she goes into a home AFTER the look back period, then such an annuity will be protected. So, if she does indeed gift this amount to you (no gift taxes due, only have to file a gift tax from in the year of the gift), you and she are taking a gamble that if might be protected. It may be worth the effort . . . but don't try to hide it from Medicaid at any time (disclosure will have to be made). Either way, if she goes into a nursing home or some assisted living facility within this look back period, she MUST spend down what she has before she will get the Medicate coverage.
If she does make it and doesn't go into some home until after the look back period, Medicaid won't allow the income you plan on giving her. Medicaid will take the money you try to give here this way.
So, like I told my own mother (who's about the same age) and grandfather (her father) who had similar assets and much the same issues . . .SPEND IT! The sooner they spend it the better due to the amount you're talking about. Your Mom may say something like . . . I don't need anything and/or don't know what to spend it on. She could buy a new bed, a new TV or buy something that can be inherited . . . a BIG diamond ring???? ;-) If she doesn't spend it, she'll have to use the money to pay the rental fees as the home she chooses until she's down to $2,000 and then Medicaid will kick in.
There are Medicaid case workers who help people with the paper work and figuring some of this out. You may want to try and find a local Medicaid case worker (eventually you'll have to when that time comes for your mother to receive Medicaid assistance) and see what the process will be and what they might suggest.
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