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Would this be considered income and have to be reported to IRS? We also heard that she "could" designate a gift of $12,000 a year, true? Is this reportable income to the receipient?

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Very good advice. An elder attorney is the way to go, as then you won't have problems down the road. Do it all legally.

If not for us, our elders would be paying out a lot of money for care. If you are taking over care, likely you will not need to be paid as an agency would charge. It can be win/win for everyone. But it needs to be done by an attorney, especially with the new Medicaid laws.

Spending down to Medicaid is usually for nursing home purposes, and is not hard to do if the elder needs a lot of help. Once they are in a nursing home, all but very wealthy people will eventually "spend down," unless they have a very good long-term insurance policy.

It's expensive business, this caregiving. Most people would prefer a family member as a caregiver, and most family members can do the care cheaper than an agency. Of course, if the care of a nursing home is required, that changes the picture. You are still a caregiver, but you have help. They need you just as much, as you are the advocate and the person who reminds them that they are not abandoned. You are a great bunch of people.


Carol
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Yes, Austin is right. You have done what so many people would not even dream of doing. Where we live, we are surrounded by many younger people with very high-powered jobs. My friends, who are 20 years younger than I am say that they would never dream of doing what I do. These people may not have had to face the reality of parents getting older, but they are very firm in their beliefs. NO WAY they say and that is a pity. Pat on the back and know for sure that you have done your best. That is all that matters.
Linda
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Xbassman I am so sorry about your Mom but you did care for her at home as long as it was possible-I was going to have to do that with my husband and he did agree with me the last few years having him at home was very hard for me as I know it was for you but there usually comes a time you just can not do it any longer and now you will still be there for her and it does take a lot of time and effort to make sure she is being cared for well - I hope she is close by where you live- if my husband had not passed we were going to move him to a nursing home closer to where we live that had more liberal visiting hours. You can be proud of yourselves that you cared for her as long as you were able to do it.
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That is chap!!! The ones by us get 8 - 10,000.00 per month! Consider yourself lucky!
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It's to late for me, we "had" to put Mother in the nursing home due to outragous behaviour, dementia, paranoia and other things. We just could not leave her alone in the house any longer for fear it would be a pile of ashes when we got back. Now the NH is getting $2500 a moneh.
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I have been caring for my father for 4 years. For the first 3 years he lived with me, I did not receive compensation, but as his care giving needs increased and he was not allowed to be left alone, I asked an elder attorney for some help. A care giver's contract was set up for me. The amount of money that you receive will depend upon the amount of care your elder needs. You should have the contract done legally even if the fees seem high (it was about $2000.00 for me), but will spare me problems later. So yes, you may absolutely recieve some money from your Mother. Consider it this way: it is her money and if she chooses to use it to stay with you rather than in assisted living (which costs $4000-$7500 per month depending upon your state), it is her perogative. You will be required to submit an annual report to the court to assure that the monies are accounted for.
In regards to funerals, these can be prepaid, but they must be "irrevocable" meaning that the arrangements cannot be cancelled (that is a Medicaid rule).
People talk about "spending down to Medicaid" but be careful of this. You don't want your care recipient spending down only to find out she is in good enough health not to need hospitalization and then left without any money.
Hope this helps somewhat.
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even when you are in the medicaide proccess you are able to use her money to prepay the funeral and that way she will have her wishes honored which is a good thing to do ahead.
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In regard to a parent's funeral expenses, these can be pre-paid by your mother through a funeral home. The funds are kept in escrow and these funds are not considered if you later apply for Medicaid to pay some of her nursing home costs.
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You should not have to go into debt to take care of her-as long as she can afford to pay her share she should it is much better to help you out so she can stay out of a nursing home because if you have any experience with the medicade application your eyes are opened up and beware of elder lawyers who give semeniars and promise you the moon we got sucker but good a number of years ago he had told us not to worry about debt because it could be subtracted from our assets if we had to go on medicade so my husband continued to spend money like it grew on trees and when he died he left me in a mess of debt and when he was going to have to go on medicade I got an awakening about how it really works-I would love to go to another one of his semeniars and get up and tell everyone there the truth but I would probably get myself in trouble a friend of mine told me that other lawyers told her to stay away from people like him and when I went to his office a few years ago I found that all the paperwork I had sent to his office to put things into our trust were not done and when I asked what happened to all the things I had sent I was shown the door and we paid a lot of money up front for his services so beware esp. if they serve you a dinner to draw you in-I wish I had saved his newsletters where he made promises but I did not and he would probably denie everything now.
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I'd go through your state aging services and see what she qualifies for. There are services, of course, that do this, but they cost money. You'll have to see what, if anything, she qualifies for free. A lot depends on her financial condition.
Carol
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My husband and I are going to bring his mother in to stay with us in our home. We both work full time, she has been able to qualify for passport which has helped us in getting equipment needed to assist her. My question is we will need some one to sit with her every day that we work, passport states they do not cover that, is there another type of benefit that might be able to help us. She does not have alot of income so if there were help out there that we would be able to apply to it would be very helpfull.
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Definitely look into declaring your mother as an adult dependent and work with an accountant who knows Medicaid law, and perhaps an attorney as well. You should be able to do something here, but you need to be careful because of the Medicaid look back time. Do it all legally and keep good records. Get expert help and it should be okay. Yes, in most instances, $12000 a year can be "gifted" without you being taxed, but again check with an accountant.
Carol
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Sharing expenses is a good thing and believe we will investigate and come up with a equitable monthly room and board fee. That still does not eliminate the baloon note that is looming over us when Mother passes for funeral expenses.
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Your best solution would be to have an attorney specializing in elder law draw up a "care giver's contract" for you which specifies the amount that would be paid to you and for what reasons it would be paid. By creating a care contract, you are assuring Medicaid that this is a legitimate payment coming from your parent's account and it will not create a problem when they "look back".

It is true that parents are allowed to gift their children $12,000 per year but that only applies to income tax, not Medicaid. Medicaid will count that as a non legitimate expense and your elder parent may not qualify for Medicaid until that $12,000 is repaid.

The money received from your parent MUST be declared but there are usually enough deductions to off-set the increase in income. Keep track of all miles incurred when taking your parent to appointments, etc. Keep track of the amount of space that they are utilizing in your home, etc.

In reality, you are saving your parent money by caring for her and as long as you are putting forth your best effort in caring for her, then you must realize that it is your right not to suffer in doing so. Just make sure you have all your "ducks in a row" so-to-speak.

Shelley
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mqflowers
I don't think so, but better ask an accountant. I take money every year and put it into a CD. That way, if she needs it, the money is there, just not in her name.
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Can you declare your parents as a dependent even though they file taxes also?
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Everyone can gift money to their children -- $12,000 per year to each child. It's the law. However, why couldn't she just share the expenses since she's living in the home, much the same as a roommate would?
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xbassman
Look into the gift. It may be asked back for if and when she goes into a NH and Medicaid has to pay. However, room and board is OK. We do it and could not make ends meet with her expenses if we didn't
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My siblings are worthless. Me and my husband care for my Mom. Fortunately my husband retired April 2009 and offered to be the caregiver for my Mom. I pay him, just as I paid my siblings when she was in their care. I pick up the caregiving when I get home from work, and I shower, wash her hair and change her colostomy bag. I do not feel the least bit guilty charging my Mom because she is getting much better care than she would if she was still at my brothers' homes or in a nursing home. I also pay myself too.
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Here is what concerns us; If Mother were to enter a nursing facility, and knowing the monthly costs plus sundry expenses, her meger savings would dry up in a hurry. Then....when funeral expenses hit, and hers would be high and she wants to be sent across the country to be buried, it would be up to us to foot the bill. 10-15K is not out of the question. No insurance or any other help is there, just us. Her sisters might kick in but can't depend of that. NO matter how I impress her how important it would be to pre-pay the funeral I just can't get thru. So now you see where the 12K "gift" would help us out. I don't think the "look back" comes into play on a gift, and don't think it is a taxable item.
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We declare my mom as a dependent and collect room and board. Less expensive than a NH!!!!! If we didn't, she could not stay with us. We will not go into debt to take care of her!
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You might also consider claiming your mother as a dependent adult on your taxes. If she lives with you and those costs amount to more than 50% of her expenses, then she qualifies as your dependent. Be sure to discuss this with a tax accountant first.
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There are a lot of things to consider here. If you go the "gift" route, bear in mind that if your mother later enters a nursing home and applies for Medicaid to pay the bill, there is a federal "look back" provision of 5 years.
It seems to me that if you were to simply determine her share of of the family costs of food, shelter, transportation, etc., you could come up with a reasonable monthly amount to charge her. I don't believe it would be taxable, but you could always check with IRS.
If there are other siblings who aren't doing as much for your mother, collecting a reasonable amount for room and board helps level the playing field with them.
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Assisted Care Facilities charge from $3,000 to $10,000 per MONTH. If your mom is able to pay for her room and board, then she should. You should check with an accountant to find out how you should record the money since it is going for her expenses.

Btw, if your adult child move home and paid you for room and board, would this be any different?
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As I understand the law, a parent can "gift" $12,000 per year to each of her children. Check with your accountant about this and about caregiving fees - they vary depending on her circumstances and whether she has LTC care insurance and whether you qualify under her policy as caregivers.
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