I want to put mom's money in to a CD to earn more interest. Anyone hear of this?

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Hi, my Mom has approximately 32k in a regular savings account. She is living with me and my wife now and has no expenses, other than food and clothing, which her SS is more than enough to handle. So I want to put that money in to a CD to earn more interest. I realize this will be a 'transfer of funds' to me and know there is no way to get around the 30 month look back (live in California). In the event that she needs a nursing home, whether or not that money is transferred to me or kept in her name in this savings account is irrelevant because I realize that amount of money will have to go toward the nursing home until depleted either way, SO if I transfer that amount to a CD, when the 'look back' sees that she transferred money in to my account, they will penalize her OR if if it's in her name in the savings, they will make her use that money until it's depleted. It is exactly the same thing. That money is there for her IF she needs a NH in the future. AND IF she does NOT need to go in to a NH, the money is in an interest bearing CD, making money, for however long she lives. I am the heir to her $$, so it's just a way of making that money make money. Anyone ever done this? AND yes, I could keep it in her name...but if she lives, say, another 3 years, then she is past the look back time. Being financially prudent, it just makes sense. Has anyone ever heard of this before? Also, this is her only asset, nothing else. She probably could go in to assisted living now and deplete that money (probably in 3 months) but she is happier here with us. Thank you.

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There is something else you could do to get around a will. You could be added joint to your mother's accounts or have the money in her accounts payable to you upon her death. That is easier to do and less confrontational than changing of the will if she wants to direct the money to you without worrying about if she were to need Medicaid.
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Vegaslady, yes, you are right. That is the most common misconception there is! A parent can gift as much as they want throughout their life with no gift tax UNLESS the money equals more than 5 million plus (in California) in their lifetime and then the gift tax applies. We know this only because our elder attorney and our CPA advised us of this. The $13k annually is only if the amount will eventually be 5 million. Yeah, so many people have misunderstood that law (ourselves included) and pay $$ to find this out from an attorney. I know you must think, then, that our attorney would be the one to ask my initial question to, and you're right...I just wanted to know if others had actually done this. I have decided to leave the $$ alone. If it is there when and if she needs it for a NH, then it will only pay for approx 3 to 4 months, anyway, or I can use it to get people to come in and help out when we go on vacation and don't want to leave her alone for long periods of time. I will be honest and say that she offered this $$ to us because her 2 other children won't help out. It is that old familiar 'family drama' and so convoluted (the other 2 kids already got their inheritance of over 1 million years and years ago (way past the look back) and now won't do one thing. One hasn't even contacted her in forever. Yes, we could change the will/trust and delete them, but we may be beyond being able to get past another 'look back' period and if I truly am the only heir, it will most likely be gone to the NH. So confusing, just as so many other people's stories are...thanks for listening!
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Gift tax is on the giver, not the one who gets the gift.
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It is NOT financially prudent, because it would trigger a large gift tax and raise you a few tax brackets. It will also trigger a look back penalty. Now sit down with her banker and get some common sense type advice. By the way, annuities pay better than CD's
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Cathee, you may find that the rate on CD's right now aren't worth the potential problem of setting one up. The rates on both savings and CD's are low in my area. I would check the rates and do the math to see if the amount earned in interest is worth considering at your mother's age. If you do decide to transfer, you can keep the money in your mother's name with you as her personal representative if you are POA. You would have to have her SSN on the account. As long as you did that, it would make things totally transparent if she needed to apply for MediCal in the future.
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