Protecting my small savings from nursing home expense. Can I loan it to my kids interest free for five yrs.? I have only $11,000 in savings, I would like to give/loan it to my two kids equally, I am 85, have Medicare & Blue Cross coverage if I need nursing home care & also $2,000 a month S.S.
Dottie, it's good that you are thinking ahead of finances & Medicaid. Personally if 11k is all you truly have for assets & you do not have a home or a car and your 2k in SS is all you have for income, I would suggest first & foremost use some of the 11k to update all your legal if it's not done within past few years; buy a fully paid preneed funeral & burial; get new eyeglasses & hearing aid; a better quality walker, like a nicer Hugo style walker; and get some dental work done. Then see just how much $$ is left.
If you give all your 11k away -which is really a good emergency fund amount - and say crack 2 teeth and need them replaced with posts and crowns, where will the $ come from? Those dental costs could easily be 5k or more per tooth.
Medicare - is a wonderful program - but usually does not cover dental and may only cover the lowest, cheesiest eyeglasses, walker, etc. Unless your BCBS covers all of these, it's going to be all put of pocket to pay for. Getting dental work now while your still very much able to do this, to me, if a really excellent use of funds. Dental care once at the NH stage is pretty nonexistent. 11k could easily be totally spent on dental and not even pay for all the work needed.
Giving $ to kids will trigger a transfer penalty inquiry by Medicaid unless you wait to apply till march, 2021. If you were to do the "loan", it would probably need to be a legally binding agreement or promissory note of some kind done by an attorney and with payments set up to fit actuarial tables based on the lenders age. At 85, your kinda at the edge of most actuarial tables. For 11k - which sadly isn't much $ - all this is probably way way way more work & legal than 11k warrants.
Really think about spending first on yourself & your needs, please.