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  1. #1

    Default Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefits

    Thanks in advance for your answers.

    My grandfather passed around mid 2018. My aunt who he lived with and took care of him was the co-owner and beneficiary on all of his accounts so my understanding is that 100% of all his accounts default to her once he passed. There was no estate, trusts, or will ever set up. Supposedly he once wrote a hand written will but it was never notarized so it holds no legal value.

    My mother is below poverty level and her only income is about $800 per month from social security.

    My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like medicaid, premium free medicare part A & B, food stamps, and HUD subsidized housing.

    In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?

    My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.

    Thoughts?

    Quote Quoting Shadowbunny
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    Thoughts? Why should I and the other taxpayers support your mother if she has the money to do so herself? If you do follow through with your fraudulent scheme please let us know how long it takes you to get caught and what penalties you face.
    I started this thread in an attempt to best help my mother while playing by the rules of the game. Its interesting to see how critical individuals like yourself can be when it is very likely that you act and seek help every year to minimize payment to the tax man within the rules of the game.

    Planning the consequences of a contemplated gift for a public benefit recipient is not a “fraudulent scheme” as you put it. There is a reason why elder law and special needs attorneys have a job and there is a reason why a forum like this can be usefull in educating someone like me before I go down the “hire an attorney” route. But you already know this because a senior member already shut your mouth in another forum you responded to with your un-welcomed comments.

  2. #2
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    If your aunt wants to ensure that the money goes to the benefit of your mother, without risk of loss of benefits by your mother, your aunt should consider consulting an elder law / estate planning lawyer about setting up a special needs trust.

    If your aunt wants to give you the money as a gift, and take you at your word that you will spend it on your mother, she is free to do so. But she won't have any recourse if you misuse the money, and as long as you hold it the money could become subject to claims by your creditors, or by your present or future spouse in the event of a divorce. Also, you would have to know enough about the proper use of the money such that your subsequent gifts to your mother do not affect your mother's eligibility for benefits.

    The annual gift tax exclusion does not count toward the lifetime gift tax exemption. You can give any person up to the maximum amount of the exclusion each year without reducing your lifetime exemption.

  3. #3

    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting Mr. Knowitall
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    If your aunt wants to ensure that the money goes to the benefit of your mother, without risk of loss of benefits by your mother, your aunt should consider consulting an elder law / estate planning lawyer about setting up a special needs trust.

    If your aunt wants to give you the money as a gift, and take you at your word that you will spend it on your mother, she is free to do so. But she won't have any recourse if you misuse the money, and as long as you hold it the money could become subject to claims by your creditors, or by your present or future spouse in the event of a divorce. Also, you would have to know enough about the proper use of the money such that your subsequent gifts to your mother do not affect your mother's eligibility for benefits.

    The annual gift tax exclusion does not count toward the lifetime gift tax exemption. You can give any person up to the maximum amount of the exclusion each year without reducing your lifetime exemption.
    Thank you for replying and for your helpful feedback. This is valuble information.

    Quote Quoting Mr. Knowitall
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    If your aunt wants to ensure that the money goes to the benefit of your mother, without risk of loss of benefits by your mother, your aunt should consider consulting an elder law / estate planning lawyer about setting up a special needs trust.

    If your aunt wants to give you the money as a gift, and take you at your word that you will spend it on your mother, she is free to do so. But she won't have any recourse if you misuse the money, and as long as you hold it the money could become subject to claims by your creditors, or by your present or future spouse in the event of a divorce. Also, you would have to know enough about the proper use of the money such that your subsequent gifts to your mother do not affect your mother's eligibility for benefits.

    The annual gift tax exclusion does not count toward the lifetime gift tax exemption. You can give any person up to the maximum amount of the exclusion each year without reducing your lifetime exemption.
    A follow up question to this response...

    Isn’t a third-party special needs trust for people with physical or mental disabilities?

    What if my mother does not have physical or mental disabilities?

  4. #4
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting ElmoHongZito
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    I started this thread in an attempt to best help my mother while playing by the rules of the game. Its interesting to see how critical individuals like yourself can be when it is very likely that you act and seek help every year to minimize payment to the tax man within the rules of the game.
    .
    Minimizing one's tax liability is a far cry from trying to stay on the welfare roles by skirting the rules. You are looking for a way to keep your mom on welfare even though the $80K would mean she doesn't need taxpayer assistance. How is that NOT fraudulent? Why is that different than hiding assets?

  5. #5
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting Shadowbunny
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    Minimizing one's tax liability is a far cry from trying to stay on the welfare roles by skirting the rules. You are looking for a way to keep your mom on welfare even though the $80K would mean she doesn't need taxpayer assistance. How is that NOT fraudulent? Why is that different than hiding assets?
    Please stop. Special needs trusts are a very common and legal way to accomplish what the OP wants to accomplish. It is unfair for you to continue to insist that what he is doing is wrong, when the government has specifically set up a procedure where someone can do just what he wants to accomplish. What you really do not understand is how disruptive a single chunk of money can be to someone's ability to survive and receive medical care. That money could easily be eaten up in less than a year and it could then become much more difficult to get her benefits put back into place.


    If we were talking about 500,000 vs 80,000 I might be more in line with your thinking, but 80k is not going to last all that long when it has to cover medical care.

  6. #6

    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting llworking
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    Please stop. Special needs trusts are a very common and legal way to accomplish what the OP wants to accomplish. It is unfair for you to continue to insist that what he is doing is wrong, when the government has specifically set up a procedure where someone can do just what he wants to accomplish. What you really do not understand is how disruptive a single chunk of money can be to someone's ability to survive and receive medical care. That money could easily be eaten up in less than a year and it could then become much more difficult to get her benefits put back into place.


    If we were talking about 500,000 vs 80,000 I might be more in line with your thinking, but 80k is not going to last all that long when it has to cover medical care.
    Thank you @llworking for understanding the law and what I am dealing with and sharing your feedback. I posted this topic in another thread as well not knowing if I would get replies in either forum and this same shadowbunny person has spent all day trolling the thread insisting that I am a crook. Its as though this person does not have anything else productive to do all day.

  7. #7
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting ElmoHongZito
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    Thank you @llworking for understanding the law and what I am dealing with and sharing your feedback. I posted this topic in another thread as well not knowing if I would get replies in either forum and this same shadowbunny person has spent all day trolling the thread insisting that I am a crook. Its as though this person does not have anything else productive to do all day.
    I really suggest that you stop looking for answers on forums like these. You really need a consult with an attorney who specializes in special needs trusts.

  8. #8

    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting llworking
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    I really suggest that you stop looking for answers on forums like these. You really need a consult with an attorney who specializes in special needs trusts.
    These forums were the easiest and quickest way to begin to acquire information specific to our situation without blindly walking into an attorneys office with no lube. Google was not very helpful in guiding me.

    I have heard “special needs trust” mentioned over and over again. How would a special needs trust apply to my mother if she is not mentally or physically disabled?

  9. #9
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    Quote Quoting ElmoHongZito
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    These forums were the easiest and quickest way to begin to acquire information specific to our situation without blindly walking into an attorneys office with no lube. Google was not very helpful in guiding me.

    I have heard “special needs trust” mentioned over and over again. How would a special needs trust apply to my mother if she is not mentally or physically disabled?
    Again, talk to a local attorney. However, I believe that the fact that she is elderly is sufficient.

  10. #10
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    Default Re: Can Someone Gift Me Money to Spend on My Mother and My Mom Not Lose Public Benefi

    From the state of Pennsylvania (which I believe the mother resides. If not, op needs to provide the state of residence of the mother as state law applies to the issue.


    Special Needs Trust (SNT)
    • An SNT is established with the resources of a disabled individual for the purpose of allowing the individual to qualify for Medical Assistance (MA).
    • A trust beneficiary must be under the age of 65 when the SNT is established and there can be no additions to the trust after the trust beneficiary turns age 65.
    • All disbursements from the SNT must be for the sole benefit of the trust beneficiary.
    • All SNTs must contain a provision that provides for reimbursement to the
    Department of Human Services (DHS) of an amount equal to the total amount of MA
    paid on behalf of the trust beneficiary.
    • All SNTs must comply with 42 U.S.C. §1396p(d)(4) and 62 P.S. §1414 and are
    subject to approval by the DHS’s Office of General Counsel (OGC) in accordance
    with 62 P.S. §1414(b)(4).
    • If there is no trust, then the resources would have been placed in the SNT would be
    considered available resources in determining the individual’s eligibility for MA.

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