How much money are you allowed to gift to each child, per year? And, does it need to be paid back?

Asked almost 4 years ago - Reynoldsburg, OH

Mom is thinking about gifting each of her (5) children, $5,000, for financial help.
She is age 82, and, not in great health. We do not plan to put her in a nursing home.
However, if she would need to go, does the money need to be paid back?, and by whom.

What happens if she has no assets at the time a nursing home is considerd?

Attorney answers (3)

  1. Elizabeth Smith Schmitz

    Contributor Level 14

    Answered . If your mother was to go into a nursing home within the next 5 years and needed to qualify for Medicaid then she would be ineligible for approximately 4 months (using today's rates). A family member would need to provide for her care during that time.

    Your mother should discuss this idea with an elder law attorney before she makes the gifts.

  2. Geraldine Anne Brown

    Contributor Level 14

    Answered . Anyone can give another $13,000 with no tax consequences. If more than $13,000 is given, a gift tax return must be filed. There still will be no tax unless the person has given away more than the exemption amount, which at the current time is $1,000,000.00.
    For Medicaid qualification, any amounts given away within five years before the application will create a penalty period in which Medicaid will not pay unless the amounts are fully paid back. Partial payments are not sufficient. The money would need to be paid back by the person who received the gift, but it is not a problem if someone helps them out to pay it.
    Your mother should probably visit an attorney who can give her the necessary information about the specific medicaid rules for Ohio. Be sure that the attorney is well experienced in doing Medicaid planning,
    This is general information not intended as legal advice. Geraldine Brown is licensed in Michigan.

  3. Henry C. Weatherby

    Pro

    Contributor Level 12

    Answered . From a gift tax perspective ther is no problem in what you propose. From a Medicaid standpoint, there is a potential problem. if mom needs assitance in paying for care within 5 years of the date of the gifts there will be a penalty period. YOu need to see a qualified elder law attorney. I recommend that you call
    C. Lawrence Huddleston, Esq.
    HUDDLESTON LAW GROUP LPA
    Suite 210 Commerce National Bank Building
    Columbus, Ohio 43214
    Phone: (614) 488-7878
    clh@huddlaw.com
    www.huddlaw.com

    If he can not represent you, I am sure his office can suggest a good local elder law attorney who can.

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