Can you gift money to your kids?
It all depends! What a true statement!
It is well known that for Estate and Gift tax purposes ( The Federal Annual Gift Tax Exclusion) any one person may gift each year up to $14,000 to any person. In fact, you can gift $14,000 to any number of persons in one calendar year. This is a true statement of the tax law, but what happens if rather than the IRS asking the question, the question is asked during a Medicaid application.
The answer is there is no allowable gifting limit for transfers for Medicaid long-term care qualification and an applicant making gifts during the five (5) year look back period is penalized and sanctioned. The current rule is that all “uncompensated transfers” within the five (5) year look back period are combined for purposes of determining the penalty period.
This is a trap for the not advised and like all legal matters, it is important to ask your lawyer for guidance when making gifts. We will help you here in Morehead City, Beaufort, New Bern and other eastern North Carolina cities.