I heard that I am allowed to give away up to $15,000.00 per recipient, per year, without paying any gift tax. Is that a good way to make sure my estate is not consumed by the cost of nursing home care? Not always. Even though you may not pay taxes on those gifts, all gifts within 5 years count for Medicaid eligibility if you go into a nursing home and run out of money. That can backfire on you: if you run out of money and apply for Medicaid, your nursing home will not be paid for, and the amount of time that disqualification lasts depends upon the total amount you gave away within the 5-year period. Before making gifts, consult with an experienced Elderlaw attorney.
-Attorney Jack N. Alpern