Can someone gift me a large amount of money to spend on my mother without my mother losing public benefits?

[ElmoHongZito]

Thanks in advance for your answers.

My grandfather passed around mid 2018. My aunt who he lived with and took care of him was the co-owner and beneficiary on all of his accounts so my understanding is that 100% of all his accounts default to her once he passed. There was no estate, trusts, or will ever set up. Supposedly he once wrote a hand written will but it was never notarized so it holds no legal value.

My mother is below poverty level and her only income is about $800 per month from social security.

My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like medicaid, premium free medicare part A & B, food stamps, and HUD subsidized housing.

In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?

My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.

Thoughts?

 

[adjusterjack]

In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?

If you are talking about a few bucks here and there and a couple hundred for a plane ticket probably not since public benefits allow the recipient a minimal amount of income and assets. But if you are talking about paying off a car loan balance of thousands of dollars the asset goes from having no equity to suddenly being worth several thousands or paying her rent and other major expenses. She would have to report that and deal with whatever effect it has on her benefits.

I suspect that you want to do this secretly without her reporting any change in income or assets and that would be fraud.

I suggest you google each of the benefit plans and see how changes in income and assets effect benefits. They may all have different thresholds.

The cleanest way is for your aunt to give your mother the $80,000. Your mother pays her own way for as long as the $80,000 lasts and she can requalify for public benefits when she is impoverished again.

My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.

That's correct. Though I think it's over $10,000,000 these days.

 

[xylene]

Your aunt could certainly give you the money without any consequences to you mom's benefits.

With 80,000 bucks you could work with a financial planner and ideally a lawyer to protect your mom's interestes in how you dispense the money.

The kind of lawyer who does this work is a special needs lawyer.

You have a lot of options.

 

[Shadowbunny]

My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like medicaid, premium free medicare part A & B, food stamps, and HUD subsidized housing.

So you want to commit fraud so the taxpayers can continue to support your mother?

 

[xylene]

So you want to commit fraud so the taxpayers can continue to support your mother?

Please, nothing about the Aunt's, the OP's or the beneficiary Mother's intent even come close to fraud.

Planning the consequnces of a contemplated gift for a Social Security beneficiary is NOT fraud, and the detailed, specific and highly policed rules are more than sufficient to protect the 'taxpayers' you are pathetically and irrelevantly squealing about.

 

[justalayman]

Please, nothing about the Aunt's, the OP's or the beneficiary Mother's intent even come close to fraud.

Planning the consequnces of a contemplated gift for a Social Security beneficiary is NOT fraud, and the detailed, specific and highly policed rules are more than sufficient to protect the 'taxpayers' you are pathetically and irrelevantly squealing about.

Ok, educate me.

Don’t gifts to the mother have to be reported as income to the various agencies, at least in the methods suggested by the op? Isn’t it probable the anticipated gifts would disqualify the mother for some if not all of the various benefits?

 

[LdiJ]

Thanks in advance for your answers.

My grandfather passed around mid 2018. My aunt who he lived with and took care of him was the co-owner and beneficiary on all of his accounts so my understanding is that 100% of all his accounts default to her once he passed. There was no estate, trusts, or will ever set up. Supposedly he once wrote a hand written will but it was never notarized so it holds no legal value.

My mother is below poverty level and her only income is about $800 per month from social security.

My aunt wants to give my mother around 80k however that would cause my mom to lose certain public benefits she currently recieves like medicaid, premium free medicare part A & B, food stamps, and HUD subsidized housing.

In order to maintain my mothers benefits and not put her in a worse financial position than she is currently in, could my aunt simply wire the money to my account and then I could pay off my mothers car, any small debt she has, and moving forward when she needs something I can buy it for her online and have it shipped to her deducting it from that money?

My understanding is that if my aunt did this she would have to file a gift tax return since the amount exceeds 15k however it would not be subject to taxes unless she exceeds the lifetime exemption gift amount which is over 5 million.

Thoughts?

With 80k being involved it would be wiser for your aunt to set up a special needs trust for your mother. You could be the trustee or your aunt could be the trustee or she could appoint someone else. That would allow for extra needs of your mother to be met without any hint of fraud being involved.

 

[xylene]

Don’t gifts to the mother have to be reported as income to the various agencies, at least in the methods suggested by the op? Isn’t it probable the anticipated gifts would disqualify the mother for some if not all of the various benefits?

Yes and yes, duh.

Deciding not to make a large gift to a SSI beneficiary because of it may impact their eligibility for benefits is not fraud or some taxpayer abuse nonsesne.

The amount involved is more than sufficient to pay for a lawyer to PLAN for this.

They need a competent advisor familiar with special needs planing and the exact details of everyone's finances and the mother's current debts.

Third party special needs trusts are not some kind of fraudlent scam to abuse the taxpayet and the law provides for them. The law allows them for good reason, it enhances the life outcomes of disabled persons without taxpayer expense. That's a public good that has real benefits, however myopic some people whinging unhelpfully about 'taxpayers' may find it.

AND

Your aunt could certainly give you the money without any consequences to you mom's benefits.

That statement is 100% factual. The OP receivng the gifted money would not be income for Mom. Of course he could be bound only by filial piety and nothing else to give the money to mom. The aunt does not necessarily need to participate in setting up a trust..

This is why they need to talk to a special needs advisor before doing anything. It's not a DIY project.

 

[ElmoHongZito]

Yes and yes, duh.

Deciding not to make a large gift to a SSI beneficiary because of it may impact their eligibility for benefits is not fraud or some taxpayer abuse nonsesne.

The amount involved is more than sufficient to pay for a lawyer to PLAN for this.

They need a competent advisor familiar with special needs planing and the exact details of everyone's finances and the mother's current debts.

Third party special needs trusts are not some kind of fraudlent scam to abuse the taxpayet and the law provides for them. The law allows them for good reason, it enhances the life outcomes of disabled persons without taxpayer expense. That's a public good that has real benefits, however myopic some people whinging unhelpfully about 'taxpayers' may find it.

AND

Your aunt could certainly give you the money without any consequences to you mom's benefits.

That statement is 100% factual. The OP receivng the gifted money would not be income for Mom. Of course he could be bound only by filial piety and nothing else to give the money to mom. The aunt does not necessarily need to participate in setting up a trust..

This is why they need to talk to a special needs advisor before doing anything. It's not a DIY project.

Thank you for your factual feedback without making accusations as others on these forums find very easy to do.

I like to be strategic and due diligent with my own finances and want to help my mother do the same since 80k can quickly put her in a worse medical coverage and financial situation than she is currently in.

Initially I thought a SPIA would be a good idea which could spin off about $400 per month but I soon realized that an additional $400 when you take away some of her benefits her net net financial situation is much worse than her present one which is already pretty lousy.

The only thing I would clarify is that my mother is not an SSI beneficiary as I understand it. She recieves a check from social security based on what she contributed to social security during her employment years. I think that is much different than supplemental SSI.

 

[LdiJ]

Thank you for your factual feedback without making accusations as others on these forums find very easy to do.

I like to be strategic and due diligent with my own finances and want to help my mother do the same since 80k can quickly put her in a worse medical coverage and financial situation than she is currently in.

Initially I thought a SPIA would be a good idea which could spin off about $400 per month but I soon realized that an additional $400 when you take away some of her benefits her net net financial situation is much worse than her present one which is already pretty lousy.

The only thing I would clarify is that my mother is not an SSI beneficiary as I understand it. She recieves a check from social security based on what she contributed to social security during her employment years. I think that is much different than supplemental SSI.

Its possible that your mother is an SSDI (Social Security Disability Income) beneficiary rather than an SSI (Supplemental Security Income) beneficiary. There is a big difference between the two and the rules are different between the two. You need to be certain which it is for your mother prior to trying to figure out how to make things better for her.

 

[ElmoHongZito]

Its possible that your mother is an SSDI (Social Security Disability Income) beneficiary rather than an SSI (Supplemental Security Income) beneficiary. There is a big difference between the two and the rules are different between the two. You need to be certain which it is for your mother prior to trying to figure out how to make things better for her.

It is neither. The $800 she recieves monthly is her social security retirement benefit which is based on her lifetime earnings. The benefits that I am concerned that she may lose have nothing to do with social security.

 

[justalayman]

Yes and yes, duh.

Deciding not to make a large gift to a SSI beneficiary because of it may impact their eligibility for benefits is not fraud or some taxpayer abuse nonsesne.

The amount involved is more than sufficient to pay for a lawyer to PLAN for this.

They need a competent advisor familiar with special needs planing and the exact details of everyone's finances and the mother's current debts.

Third party special needs trusts are not some kind of fraudlent scam to abuse the taxpayet and the law provides for them. The law allows them for good reason, it enhances the life outcomes of disabled persons without taxpayer expense. That's a public good that has real benefits, however myopic some people whinging unhelpfully about 'taxpayers' may find it.

AND

Your aunt could certainly give you the money without any consequences to you mom's benefits.

That statement is 100% factual. The OP receivng the gifted money would not be income for Mom. Of course he could be bound only by filial piety and nothing else to give the money to mom. The aunt does not necessarily need to participate in setting up a trust..

This is why they need to talk to a special needs advisor before doing anything. It's not a DIY project.

But the op did not propose payments via a special needs trust. Maybe if you had explained that rather than simply chastise the other poster for pointing out what actually does appear to be fraudulent activity, even if uninentional, I wouldn’t have challenged you to flesh out your minimalist post.

 

[LdiJ]

It is neither. The $800 she recieves monthly is her social security retirement benefit which is based on her lifetime earnings. The benefits that I am concerned that she may lose have nothing to do with social security.

So she is over full retirement age? What kind of benefits are you talking about? She should already be on Medicare which would not be impacted by a little bit more income. Are you talking about food stamps? What else?

 

[ElmoHongZito]

So she is over full retirement age? What kind of benefits are you talking about? She should already be on Medicare which would not be impacted by a little bit more income. Are you talking about food stamps? What else?

Its all listed in my original post

 

[ElmoHongZito]

But the op did not propose payments via a special needs trust. Maybe if you had explained that rather than simply chastise the other poster for pointing out what actually does appear to be fraudulent activity, even if uninentional, I wouldn’t have challenged you to flesh out your minimalist post.

@Shadowbunny said “So you want to commit fraud so the taxpayers can continue to support your mother?”

@xylene said “...the 'taxpayers' you are pathetically and irrelevantly squealing about.”

If you and @Shadowbunny have a problem with “taxpayers supporting my mother” while me or my aunt enhance her quality of life but you are perfectly fine with us doing just that through a special needs trust, are you not pathetically and irrevelantly squealing about taxpayers money?