The estate check is for less than $5,000. My mom has mentioned to me that she wanted to give some to my sister and I. I am worried about it being seen as a gift for Medicaid. It will also put her over the money allowance for VT. My question is if we cash it and distribute it that way would it be a way to get around it? What about inheritance tax?
And you do not understand that your mother cannot GIFT you and Sister?
You should now go to see an Elder Law Attorney to learn about the rules for being a POA in your State. You should also do online research in how to keep meticulous records, into gifting and what can be done and into "self-enrichment" as a POA.
You should know that your mother's funds stand to pay for this attorney.
This attorney will also give you options about this cash, and how to handle it.
Being POA is a legal fiduciary duty that is held to the very highest standards. You cannot plead ignorance before the law if things go South. So do see an elder law attorney at your earliest convenience.
I served as POA and Trustee of Trust for my brother, was assigned the duties five years ago. Came here deparate for help. Had a great attorney. Was a steep learning curve but am so proud at how well ultimately it all went. GOOD LUCK to you. We all start just where you are.
Get expert help; that's something you CAN spend on as POA. As well as future funeral needs/cremation, etc.
OP - as a Medicaid recipient, do not have Mom sign that inheritance check over to anyone. There ARE items Mom might need that she can purchase to keep her cash assets under the Medicaid limit in your state. Hearing aids, new dentures if needed, maybe a lift chair or adjustable bed and as other have suggested, a prepaid burial trust. Speak with an Elder Law attorney so Mom can benefit from this inheritance.
If there was a will with small bequests to other family members, were corners cut assuming that M would hand it out? If so, there may be a way out of this that don’t involve Medicaid and VT, by distributing directly to the other beneficiaries. If the check was made out to you personally, it may be that you can cash it, give M the max she can get without triggering all these other problems, and distribute the rest. Yes, it’s illegal, but it will probably work.
Alva’s advice is spot on legally. However for so many complications arising out of such a very small bequest, you may decide to risk the chance of some government department official prompting very expensive investigations to prove that it wasn’t done ‘properly’. If you hire a lawyer, and you pay them as POA, it might even reduce the distribution enough to solve the problem!
If she is on LTC Medicaid or Community based, it can be imho dealt with and done as a DIY if you have your wits about you as her POAas it’s a pretty modest sum. But you have to - HAVE TO - have a plan in place as to its spend B4 you deposit her check into her bank account. Till you do, that check in her name has to stay in limbo and undeposited.
Stuff like this will surface as the distribution done by an Executor will have all items recorded in probate court. Depending on how the Executor does their process (I’ve been one x 3) or what the State requires, there could be a 1099 issued to everyone- EVERY SINGLE PERSON- who is getting $ (the distribution of assets) from the Estate if it’s over $600 in value. (I did and there are still folks peeved about this). The IRS 1099 will show up to any X reference a caseworker does. And some States have this set to run automatically during tax season. S**** surfaces and 5K will take one over the asset limit for LTC Medicaid.
It's their money, so apply it to her medical care. If her income and assets are low enough to be on state paid Medicaid, she's not wealthy enough to gift money or assets
People here will share their personal experiences.
Never totally rely on feedback here, while very well intentioned (as) State laws may differ - and others may get different info than what you get.
You want to be sure of how to proceed.
I believe it has everything to do with how your mom's account is set up.
Is it a joint account?
Does she have her own?
Is it going into a POA official checking or savings account?
From my experience and belief: I don't know if they can track it. It seems to depend on how you process the check ... and checks MUST be deposited (in a Bank) before they will cash them (my experience). I believe it has everything to do with the ssn you use (as I had to provide mine when managing a fiduciary, soc sec payee rep., and bank account(s), and POA responsibilities.
Gena / Touch Matters
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