My sister was suing my mother over property, my mother called my husband and told him she is sending him money that she wants me to have for our family. She continued to say, she has never given us anything and that she feels guilty for it. She had been for 20yrs paying for everything for my sister and her 2 children. She stated she was scared my sister was trying to get all her money now and wanted to make sure we got some of it. My husband question my mother on many occasions saying "Are you sure you want us to have this? What will you live on?" She assured my husband she wanted to & that she receives 2 checks a month and has plenty to live on.
We are in very bad financial debt so we were so happy to get this unexcepted help. We used the money to pay off credit cards & loans. We are still in debt but it helped. Now my sister is saying we must return the money & my mom is lying saying she asked us to "hold" it for her. She NEVER said that. She is bullied by my sister and once my sister found out she couldn't get money from mom when she sued her. She then turned around & embraced my mother acting as if she cares & now says my mom has dementia & I must return the money. We don't have it! We paid bills! We have proof. Plus my Mom said we could use it. Legally, do you have to return a gift? There is nothing stating we were supposed to "hold" it.
Please help me
Before you start going to lawyers and paying all kinds of money consider this:
It is perfectly reasonable for your mother to pay a reasonable amount for room and board no matter where she is living and the powers that be will not penalize her for paying for her upkeep in your sister's home. To create the adequate paper trail and to keep taxes to a minimum the situation should be handled as follows:
1. There should be a written agreement between your mother and your sister. This should be an agreement for room rental and should not be an agreement for board and personal services.
2. The rent should be fair market value or less. You want to consume as much of the $1,000 for rent as possible. So if a similar room with utilities would rent for $700 per month, charge that. This will technically be considered rental income to your sister. If she decides to report the transaction she will then be able to deduct pro rata expenses including utilities, property taxes, insurance, mortgage payments, etc. This should offset the rental income. If it doesn't, she can drop the rent until it does. That way the income and expenses will balance out to $0. Anything over the rent amount up to $1,000 will be mom's costs for food and miscellaneous expenses. Medicaid will have no problem with her spending $200 or so a week on her needs and it won't even be questioned.
There is no need to go to the expense and subject your sister to the taxation of a Personal Service Contract.
The transfer penalty varies by state as it is based on whatever your state has as it's Medicaid NH reimbursement day rate. For TX it's about $ 143.00 a day which is low. Some states reimburse at over $ 300 a day. So that's a much quicker transfer penalty to deal with.
Now if Sissy has been providing care AND can document that her caregiving has kept mom from the NH (and going on Medicaid) for a full 2 years prior to mom's admission into the NH, then often there will be no transfer penalty. The sticky part is "providing care" if your sister works full-time as it might be turned down. Really I've found that having an elder care attorney advise you on this is well worth it.
Good luck and keep a sense of humor in all this!
Further, as you were told by one expert, your mom's $ to you appears to have been a gift. Was she mentally capable of making such a gift?
@michael froman- how do u get a litigator when we live in different states?
"Gifting" for Medicaid eligibility purposes is ANY transfer of assets made for less than fair market value compensation whether in the form of goods or services.
Therefore, a gift made to help a loved one out a financial jam IS considered a non-compensated gift and if made within five years of application for Medicaid can be accumulated with other gifts made during the same period of time to impose a Medicaid penalty.
Medicaid will not require return of gifts. It does not work that way. Medicaid will impose a "penalty period" based on the value of the transfer. During the penalty period the applicant will have to pay privately from whatever source.
Federal Law does provide, however, for "hardship" wherein the applicant is not able to pay privately under these circumstances.
The way to cure a gift made is to return the asset to the applicant and then use a proper strategy to move the funds (e.g., a Personal Services Contract aka Personal Care Contract whereby the the adult child is compensated - key word - for assisting the applicant).
If the adult child is also power of attorney (POA) it is legitimate for the POA to be compensated for services rendered to the principal.
Mediation is voluntary, confidential and helps disputing family members reach their own agreement.
Mediation, unlike litigation, encourages parties to speak freely, vent frustrations and pent-up feelings and then create their own solutions. Out-of-the-box thinking, open discussion and, often, the power of apology and conciliation, all help the disputants save time and money and reach agreement.
-Michael Froman
Mediation is a proven tool for resolution of a variety of conflicts. It is a voluntary and confidential process in which a neutrsl- the mediator- helps the disputants reach their own, enforceable agreement without it being ordered by a court or jury.
Litigation on the other hand, is often expensive and time-consuming. Lawsuits can drag on for years, the legal meter running, and the estate or assets involved, steadily decrease. Nobody is happy with such results. The costs of intra-family disputes can be wasteful and harmful to relationships.
Mediation encourages the parties to think outside traditional lawsuit limitations to craft solutions. Often, after venting and sometimes tearful sessions, the power of apology and conciliation helps move the parties to agreement. My experiences tell me that when disputants mediate, they usually reach accord, usually faster and cheaper than litigation where the only winners are the lawyers.
Mediation allows parties to be represented by counsel. Resolution is reached by the parties themselves. No judge or jury of strangers can impose its conclusions. The process belongs to the parties. The mediator is there to help, to listen and occasionally recap what has been agreed-upon.
Mediation is not coercive, cannot force anyone to do anything or pay any amount.
Mediation can only help, assist and encourage resolution and an end to the controversy.
Michael Froman
Mr. Robbins is a Cornell educated expert, please listen to him and take his advice. It is excellent advice.
You do not need a lawyer until someone takes some action against you. There is absolutely no reason to panic! My experience has been that most of these issues between family members are not pressed and although bad feelings may remain, legal threats/remedies die in process. To successfully "prosecute" you via a civil action (trust me, this will never be considered a criminal matter) your sister would have to prove that mom was incompetent at the time and/or that you somehow coerced or "stole" the money from her. From what you have stated, she will not succeed.
I will add this for what it is worth: I believe in repairing familial relationships. It is a huge part of happiness, fulfillment and success in your life and the lives of your progeny.
I would also like to correct some of the information provided above regarding Federal Gift Taxes.
First, a gift is not taxable to you as "income" under any circumstances. Second, the Federal Estate and Gift Tax is actually called the "Unified Federal Estate and Gift Tax" and each individual has, therefore (under current law), a lifetime exemption of $5 million for all gifts and estate assets. As a result of this lifetime exemption there will never be any tax on the gift (unless mom has over $5 million). Also, it is your mom's responsibility to file the Form 709, not yours. And, if there were tax due, it would be her obligation to pay it, not yours.
Lastly, in my neck of the woods elder law attorneys are VERY expensive and usually work on a flat fee basis. There is no reason to even approach an elder law attorney unless you have a complicated asset situation when applying for Medicaid benefits. Even then, I would seek alternatives before paying crazy fees for work that can be done by your family or a non-lawyer planners who specialize in these matters. For low income/asset applicants there are plenty of social service agencies that will assist at no charge.
Good luck!
However, should your Mother need skilled care in a long term care facility and wish to apply for title 19 -Medicaid in the future, that money will be counted as an asset for 5 years! In other words, should your Mom need nursing home care or in-home care and wish for State funding to pay, they will look back over a 5 year period and you and your Husband will be liable to pay back any "gifted" money that you received. If you have spent the money, the State WILL go after your own assets and or income to recover those funds
There is SS retirement income, SSDI (disability insurance) & SSI (supplemental security income) - they are all different and pay based on different reasons.
So what does your mom get? You kinda have a responsibility to know what's what especially as you have benefitted 24K from her.
Before this gets into a really sticky mess, and all these issues are sticky, you'll need to hire an experienced lawyer to help. To begin your search for the best lawyer for the job, contact the local bar association and ask whether it has a lawyer referral service that includes those who specialize in elder law or conservatorships. You can also contact the National Academy of Elder Law Attorneys for a referral to its members in your area.
IMHO your mom should have the following done with sis consulted beforehand:
- Durable Power of Attorney (not just POA)
- Medical Power of Attorney
- Living Will &/or Advance Directives (DNR)
- Declaration of Guardian in Event of Incapacity
- HIPAA Waiver
- Will or a Living Trust
I'm a firm believer in having an elder care attorney take care of all this. It will not be expensive as most is done by the paralegals. You do want to go in prepared with what the information is for the documents (e.g. the residence located at 123 ABC street, aka parcel #5678; Ann Smith, wife of John Smith, with the info on all the births, deaths & prior marriages) as well as valid ID for all. If the decisions have been already made, this should all be simple, straightforward paperwork. 1 - 2 hrs for intake & then 1 hr a couple of days later for the signatures to be done.
If mom has assets, then all this should be paid from her assets. This also is important if you ever get challenged. If you pay for all, and you benefit, then other family could go to court to find it a coerced document.
Your sister could make life difficult for you as 24K can be viewed as a significant amount of $. If sis wanted to become your mom's guardian or conservator, there would be a hearing in probate court and your financial situation would come out. You may be asked to provide your & your spouse personal and financial data that is entered into public record to show why you are NOT suitable as guardian. The court will X your name for police records. It can be sticky. Good luck.
If we pay taxes on this money and it winds up down the road, for whatever reason, we have to repay this money...do we just loose those taxes we paid on that money.
Also, I may be incorrect about Medicare. I know she draws social security and disability. It's very confusing.
You say she is on Medicaid and yet had $ 24,000 that she was able to give you?
Medicaid is a state and federally funded health care program for the very poor and profoundly disabled. If she has so much assets that she can just send you 24K there is something wrong and she shouldn't qualify for Medicaid. Could it be that your sister (whom I assume is DPOA/MPOA or has been the family dealing with mom and her aging & finances) is going through ''spend-down" to get her at the asset level so that in the future IF she needs to, mom can qualify for Medicaid for a NH. If that is the case, the 24K that mom gave you will make mom face a very stiff penalty period for not qualifying for Medicaid - the penalty period and how the $% is figured depends on each states NH average costs. If your state avg is 5K then you could face having to private pay the NH for 5 to 7 mos with penalty & interest. That's alot of $ and if you live in a filial responsibility state (30 of the 50 states), your sis or the NH can go after you to do that as you got the 24K. Now filial responsibility laws are kinda oddly written but NH & family in some states (PA) have successfully done it.
If this is the case, I can understand why sis is freakin' out about 24K.
Then there is the whole tax implications. You should report this on your taxes as income & if it was a check for over 10K the banks HAVE to do reporting on it due to Homeland Security concerns. IRS form 709 has to be done for any $ gifting over 11K. So if mom wrote a check to you for 24K you will have to do tax on 13K (24K -11K exempt). It will surface, IRS might not get you on this years taxes but it will come up eventually w/penalty. If you sis wanted to be antagonistic on this she can file form 709 to you on mom's behalf. IRS doesn't care whether you used 24 K to pay bills or go to the south of France, it's taxable income.
I would try to work out whatever with sis, so that you are on the same page for your mom's care. Whatever your differences need to be put aside (it sounds like alot of long seated issues). The best and optimum for mom needs to be what this is about. If mom's "2 checks a month" pay 5-8K a month, then she & you all will probably never have to worry about her running out of $, but you said she was on Medicaid so that probably isn't the case. For most of us, if they live long enough they will run out of $ to pay for care & aging related expenses whether at home or in a NH.
For Medicaid for the elderly to go in a NH, the individual must show that
1) are 65+,
2) medical condition requires a skilled level of nursing health care,
3) monthly income under their states ceiling, which is usually $ 2,000 - 2,200
4) countable assets are less than $2000 and
5) not gifted away anything of value during the look-back period. Look back period is 5 years for most states.If gifting occurred, there will be a penalty period in which although they qualify for Medicaid, they will have to private pay for the period.
Was your Mom diagnosed with Dementia by a qualified physician? To your knowledge, has your sister started legal proceedings? My feeling is that she is bluffing to see if you will just cave in and give it back. The reason I say that is because it takes money to hire an attorney and it sounds like she has been living off your Mom for years. Regardless, don't overeact to the threats but be prepared.
good luck
My sister is saying that my mother has dementia and I must return it...This is a nightmare and we are very upset. We do not have the money because we payed bills. Which we have proof.
How do I find a lawyer?
If you think your sister is taking advantage of your Mom and you have proof, she may need to be placed under an independent guardianship until this is sorted out. Also, did your Mom put something in writing to say that she was freely giving you these assets for your use and no re payment was required?
If this is causing you stress, see an elder attorney now to ask about your rights and to find out how you can protect your Mom. Another consideration is that any gift your Mom gives anyone is subject to the "5-year look back" period in the event that she needs to qualify for Medicaid and other government programs. She needs direction too.
I wish this was the first time we heard this kind of story in our forum :o(