How to handle joint account during convalescence or death

[jasonames]

Georgia...

My mother is in her late 70s and due to her failing health is starting to wonder about how we should handle her savings when her "time comes."

For example, she has about $100K in her savings account at her local bank. That's all she has in the world...no other assets. She has my name on this account as a secondary, so I can deposit and withdraw if I wanted to, however she is primary and has the tax accountability. She's wanting to know if there's a way to (a) roll the money over to me when she passes away without it being considered an inheritance and me getting hit with a heavy inheritance tax and/or (b) if she becomes unable to care for herself and has to go
into a nursing home, that she can somehow get her money to me without medicare/medicaid forcing her to spend all of her savings on her convalescence before they kick in and start providing assistance. If you have any money, the government requires that you use your own first before they start helping. Basically, she doesn't want the money she's spent 40 years saving to go to her nursing home care..she'd rather it go to her family. I know you can't just give your money away either, as the government will track back to see if you did that.

Any advice?What is the name of your state?

[mrdonsmith]

In a word, you certainly can "give" your money away. Please check IRS to see what the annual limit on avoiding a gift tax is -- probably around $12,000. She can make monetary gifts to anyone she chooses as long as she doesn't exceed the limit. E.g., if there were 8 family members, she could "gift" $96,000 in one year. Going over the gift limit produces a tax liability on the giver/donor. If one year's worth of "gifting" doesn't do it, repeat the next year. It has to happen within the tax/calendar year, so for example you could gift the limit in December 2007 and gift the limit again in Jan 2008. I knew you'd ask: No, the recipients do not pay income tax on the "gift."