Gifting Money/Avoiding Probate

As the power of attorney for finances for my mother, I have the legal power to gift her money. This is specifically stated in the POA document.  In an attempt to avoid probate, I  have attempted to gift my brother and myself the maximum each year ($14,000)  to bring her assets down to under $50,000. My brother and I are the only siblings and my mother’s will stipulates that her estate be divided equally.   $14,000 is the amount that currently can be gifted with no tax implications on either end.

However, Medicaid looks back five years when determining eligibility for Medicaid to cover nursing home expenses.  If my mother lives long enough for her assets to go to zero any gift  money will have to be paid back before she will qualify for Medicaid.   The benefit of gifting the money out even with this risk  is that assets that are over $50,000 at time of passing  will have to go through the expense and time of probate.  These financial moves I have made with the advice of an excellent elder law attorney.

This situation may work in my family with only two siblings but could easily get more complex with other families where the siblings do not get along, or an existing will does not stipulate an even split between heirs.

 

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