| Question Regarding Liquidating assets/ Mitigating estate tax |
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EBusch
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| Question Regarding Liquidating assets/ Mitigating estate tax |
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My grandfather has recently become unmanageable for my grandmother. He has not worked for 25 years, due to some "medical issues" although he was more than capable, and will likely exceed the life of my grandmother due to a heart transplant. My family is very concerned that he will be placed in an assisted living facility or nursing home on my grandmothers dime, effectively eating away everything she has worked for and leaving nothing for her children. We have recently discussed as a family having her liquidate her 401k by gifting the sum of the money to her family (I understand it's under 13,000 per person per year) before receiving it back from us and putting it in some kind of safe or safe deposit box. There is also the issue of the house that she owns. We have discussed her selling the house and having her putting the proceeds into the bank, later to extract the money from the sale in small amounts and claiming them as loss due to gambling or some other such idea in order to avoid losing the money in the long run. I am fully aware that some of this probably is unethical, besides the fact that it probably sounds disgusting to some. Don't get me wrong either, I love my grandfather, however I will not take pitty on him for wasting a gift of a young man's heart as well as his own life doing nothing for the last 25 years. I am only concerned for my grandmother's well being and that of my other family members. Please let me know if any of this is appropriate for this site, legal, ethical ect. Any and all feedback is welcome. thanks
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Sun Jun 12, 2011 5:25 am |
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coaster
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If you were my child or grandchild I would write you out of my will.
And I doubt your grandmother would appreciate this line of thought, either.
It's their money until they're both dead. Hopefully they spend everything and run out of money no sooner than or any later than the day they die.
Leave it alone. Take the high road and get on with your life. If something should perchance come your way, it's a gift. It's not anything you deserve or earned.
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Sun Jun 12, 2011 6:08 am |
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EBusch
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This is being initiated by my grandmother. You may note that I said that we have discussed this as a "family" (this includes Grandma) She is looking for ways in which she can salvage all or most of her hard earned income. I'm simply trying to find as many possibilities and options for her as I can. She does not want her hard earned money to go to the government or to a facility, rather than her family.
Last edited by EBusch on Sun Jun 12, 2011 6:40 am; edited 1 time in total |
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Sun Jun 12, 2011 6:31 am |
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EBusch
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Also, I would appreciate information that is financially, legally, and ethically relevant rather then personal opinion. thanks
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Sun Jun 12, 2011 6:37 am |
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EBusch
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obviously I have not made myself clear here so I'll try and make it simple. My grandmother is looking for ways in which she can save her money, both from her 401k and house before it is time to put my grandfather into a home which would immediately cost approx 48,000 dollars and continue to add up slowly and surely dwindling everything that she has worked for and my grandfather has contributed nothing to. She is attempting to ensure that there is something left over for her family to inherit. I'm her grandchild here and stand nothing to gain whatsoever from the situation. We are trying to hide her assets so that when the time comes to take my grandfather somewhere he can be cared for, that the government or facility cannot come in and take everything she has.
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Sun Jun 12, 2011 6:46 am |
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coaster
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quote:
Originally posted by EBusch
This is being initiated by my grandmother....I said that we have discussed this as a "family"
That puts an entirely different spin on your story. Of course. Yet you left out one important family member. Grandfather. So I still can't support your plans. Though of course, practically everything else you propose is also borderline to completely illegal and therefore also unethical which is also relevant. Whether or not it's financially prudent is entirely beside the point where the law is concerned. The two are often at odds.
If grandfather is no longer competent to manage his affairs, then there are legal options to pursue, which would give grandmother the legal right and authority to manage and to will the couple's assets as she best sees fit. Perhaps that's the best course for you to pursue. You'll need to consult an attorney, because it'll have to go before a judge.
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Sun Jun 12, 2011 7:17 am |
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coaster
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Furthermore....here's something you should do. Go and visit a nursing home where Medicaid patients are cared for on government funds until they die. Anybody who would knowingly hide assets so their old people can qualify for and be cared for at government expense in one of those hell-holes is just plain cruel and inhuman. And when (I say WHEN) the govenment finds out, they bill you for the back expenses anyway. You'd best hope they retain enough money to get into a private-pay facility. Better they should spend every last dime and die in some kind of dignity and grace with flowers next to the bed rather than in a four-bed room reeking of unchanged diapers and unchanged bedding. I'm not exaggerating. I've seen it.
Last edited by coaster on Sun Jun 12, 2011 7:26 am; edited 1 time in total |
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Sun Jun 12, 2011 7:23 am |
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EBusch
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The grandparents relationship is complicated, suffice to say that she is determined not to allow him to dwindle her life savings. lets just not go there. I'm more concerned with the possibility of other opportunities or ideas that may in fact be ethical and or legal and at the very least feasible
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Sun Jun 12, 2011 7:24 am |
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EBusch
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I understand what your saying, and as I said I care for my grandfather a great deal, but at the same time he was given a second chance at life with a heart transplant from a 20 year old boy and has spent the last 25 yrs of his life sitting in a recliner watching tv until the point that he can no longer function physically and hardly mentally. Forgive me if I do not take as much pitty on him since he wasted not one life, but two. The way I see it is the gifting part of the idea is completely legal, i know that much for sure. The part i'm worried about is the sale of the home. While it may not be legal for her to claim that she lost the money from the sale gambling, it would be in cash form and therefore untraceable. Correct?
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Sun Jun 12, 2011 7:30 am |
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coaster
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In the first place what you say about your grandfather's condition seems to fit the competency issue. Don't dismiss that avenue. It sounds like you may have reasonable cause.
Second place, it sounds like he's pretty close to needing nursing home care anyway and the lookback for Medicaid eligibility is five years. Any asset transfer within the lookback period makes a person ineligible, and if discovered after the fact they will go after the transferred assets with all the force and power of the US government, so don't even think about getting away with any cash deals; they're on to those.
Third place, if Iowa laws are like Wisconsin laws, grandmother has a 50% claim on all assets accrued while married, and if her spouse is negligent, incompetent, or worse, has legal recourse to prevent her share of the assets from being misused or wasted away.
I think your best course of action is to consult an elder-law attorney. Several hundred spent now on expert counsel can save you worlds of trouble and many, many thousands of dollars down the road.
The heart transplant doesn't have any bearing on this situation. Since it's a non-issue, separate your thoughts about it from the decisions you need to make. Thoughts about non-issues cloud decision-making.
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Sun Jun 12, 2011 4:08 pm |
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eastmn
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Works out well for some families, and becomes a nightmare for others (lose everything). Here's a legal website on asset protection. http://www.rjmintz.com/q-a/
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Sun Jun 12, 2011 6:00 pm |
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oldguy
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quote:
The way I see it is the gifting part of the idea is completely legal, i know that much for sure.
Actually, not true. Many families have tried to gift their estates to kids so that they qualify for gov't assisitance (to avoid paying their $48,000/yr bill). So the 'lookback' period was made Law to prevent this (the govt sees it as fraud). So if anyone dies within the 5-yr 'lookback' the family will be sued for the $48,000/yr.
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Sun Jun 12, 2011 6:11 pm |
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eastmn
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Oldguy, thanks for this info (lookback). What would you do (or recommend)? I read recently where one family put a lien on the parent's home (repairs/maintenance) and were able to hold on to it. My own x mother-in-law was able to hold on to her home when husband died (avoided medical suits/liens) by telling all creditors & medical that she was renting.
ASK A LAWYER:
http://www.lawyers.com
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Sun Jun 12, 2011 7:01 pm |
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