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As Their Agent Under a POA, Can I Continue My Parents’ Usual Gifting of Money to Family at Christmas?

  • February 12th, 2021
Q
My parents both have dementia and live in a nursing home. We are paying privately and will be out of funds in about two years. My parents have always given cash as Christmas gifts to each child, child's spouse, and grandchildren. Each child and spouse usually gets $100, and each grandchild gets $50. They have seven kids and 14 grandchildren. The total adds up to $2,000. As my parents’ agent under a power of attorney, am I allowed to gift the usual amounts for my parents without incurring a penalty from Medicaid? Also, am I able to gift money to their caregivers for Christmas? 
A

This is something of a gray area. Any gift is a transfer of assets that must be reported on an application for Medicaid benefits and can cause a period of ineligibility. The gifts you’re describing are small and would cause only a few weeks of ineligibility. This penalty may be avoided by arguing that there should be no penalty because the purpose was not to accelerate your parents’ qualifying for benefits but to continue their gifting pattern. But it is probably not a good idea to make the gifts. As your parents’ agent under their durable power of attorney you are going to have to deal with the application for Medicaid, the reporting of the gifts, the uncertainty about whether there will be a penalty, and with how you’ll pay the facility for the care they provide during any penalty period. That seems like a large burden given the value of the gifts at stake. But to be certain about the risk, you will need to consult with an elder law attorney in your state. You should do so in any case because there may be planning steps you can take (other than making Christmas gifts) to protect some funds for your parents and the family. To find an attorney near you, click here.

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Last Modified: 02/12/2021

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