Q: My friend got me a few pieces of clothing and an Apple Watch for Christmas this past year. We’re are not friends anymore and he wants everything back and says that if I don’t he’ll press charges against me. Can I get in trouble? (Rostraver, PA)
A: They sound like gifts. Gifts are gifts and are different from loans. Gifts are unconditional. If there was no condition attached to the gifts, they are yours. The fact that the Apple watch was given at Christmas sounds like a gift. Unless he has use for your clothes or can return them, the clothes sound like a gift. I don’t know what the other person’s story is, but as you describe it, they sound like gifts. Nonetheless, if he can convince a police officer that these were stolen, or on loan, you could be charged, but I don’t see it happening. If you are contacted by police, do not make a statement and call an attorney.
Q: My mom is trying to buy a house soon. She wants to hand down the house to me and my brother in the event something happens to her. Since I’m 26 and he’s under 18, how does inheritance tax and exemptions work? If he were to be still under 18 in that event, would he legally be able to accept it? (Pittsburgh, PA)
A: Mom handing over a home to a 26-year-old and a minor may not be advisable. Additionally, I do not believe a minor can hold title to real estate. Your mother should consult with an elder law attorney who can assess her entire financial and personal situation and recommend the best options for her. Perhaps putting the house in a revocable trust is beneficial, but no one can tell without more information. The inheritance tax rate for children is 4.5% and it is practically unavoidable unless mom transfers the house out of her name altogether. Whether the potential consequences of doing that is advisable given the low rate of inheritance tax would be her decision. Additionally, not knowing the entire picture here, your mother should be advised of Medicaid implications with such transfer if she will potentially need Medicaid coverage in the next five years.
Q: The car has been parked in front of his condo (which we will eventually sell) for months. We would like to drive the car and keep it at our house. Do I need to transfer title, or can I just put the car on my own car insurance? I am his financial power of attorney, and do not want to do anything unethical. (Hermine, PA)
A: There is a larger picture here that any lawyer would need to know before giving you a definitive answer on what seems like such a minor thing. We would need to know if your father is incompetent. If so, the transfer would need to be through the POA. Very generally, if your father has any foreseeable need to apply for Medicaid in the next five years, a transfer of this vehicle out of his name could subject him to a Medicaid penalty to the extent of the value of the transfer. If Medicaid is not an issue more information would be needed on who the potential heirs of his estate are. If these heirs would ultimately object to transferring the car into your name via the POA (if the POA authorizes such transfers or gifts), as a gift, then it may be an issue. Even using the car which will ultimately be estate property, could be objected to. If you are confident you have no potential Medicaid issues, and you are the only heir, there is less risk here, but I would still consult with a VA attorney.
Q: I got a gift from elderly person. On the check memo it say “gift”. Now he in nursing home and his niece ask me to give money back. I worked for this elderly couple for three years. She is gone. (Pittsburgh, PA)
A: More information is needed. Most importantly, was the elderly person lucid and competent when they made this “gift”? If not, many problems can arise for you. You can possibly be charged with a crime or investigated for elder abuse or sued in civil court. It all depends on the ALL of the facts. If this is a significant amount of money I would consult with a lawyer and do not spend the money until this is resolved.
Q: My one son is on Social Security Disability and I want to make sure that if I should die, he would get 1/2 of the CD to help him pay his rent. My main concern is whether if I should go into a nursing home would they take all the CD or just 1/2.
A: The answer is more complicated than you probably realize and you may want to consult with an elder law attorney with whom you can share all the facts which need to be known. If your son is on SSDI, then he can receive this gift with no penalty. If he is on SSI, which is needs based government program, this gift may jeopardize his benefits. Also, it is worth considering is how this transfer will impact your eligibility for Medicaid, in the event you need to apply for Medicaid in the future. If this transfer is done within five-years prior to your Medicaid eligibility it could rule you ineligible to receive benefits to the extent of the amount of the transfer. Also, be aware that if you title the CD as joint tenants with right of survivor, he will receive the entire value of the CD upon your death. An elder law attorney may counsel you on other methods to shelter this money for him such as a special needs trust. It would probably be worth the consultation fee.
Q: Hi. Looking for assistance on the Medicaid look-back period, details below. My mom “loaned” my sister $7000.00 3 years ago. My sister said she would pay her back but who knows if she will. I know Medicaid looks back 5 years. If her money runs out, what will happen if my sister hasn’t repaid the money? They will throw her out on the street? If my sister can repay the money (or if I can and choose to do that for her), is there a specific way I have to do so? The money was just removed from my mom’s account at the bank and handed to my sister. Could I just deposit the same amount and it is ok that there is no proof where it came from? And is it 5 years from the day Medicaid would pay or 5 years from the date I am filling out the application? Can I not even apply for Medicaid till the money is repaid? (Bridgeville, PA)
A: Do not even attempt to handle this without the advice of an experienced elder law or estate attorney who understands Medicaid. You are playing with fire. It may be possible to address the “loan” even if it’s not repaid and still avoid a penalty period should your mother need to apply for Medicaid. However, that depends on many factors that are best addressed in person with an experienced elder law attorney. Generally, a gift like this can potentially exclude your mother from receiving an amount of Medicaid funding equal to the amount of the disqualifying gift. Again, seek an opinion.
Q: I inherited some money, $8,000.00 from my boyfriend’s estate. I want to give it to my daughter but was told that I cannot do so.
A: Once you inherit the money, you can do whatever you want with the money, as it is yours. Make sure the estate paid the inheritance tax and any income tax arising from any estate asset. If the estate did not pay taxes, you may continue to be responsible for payment and you may be giving your daughter a gift that is subject to inheritance tax. If not paid, it will accumulate interest and penalties, and you could be summoned to court in the future. The one exception to this is if you are receiving Medicaid benefits or will be doing so within the next five years.