- quote -

If #2 is to have medicad pay nursing or an impovershed parent,
then many states prohibit asset transfers less than 36 months
before impovishment (some 60 months). I've heard stories of
states trying to seize such assets, but dont know how effective
it is.

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Jim Ries wrote:

- quote -

I should add--I said *potential* gift tax issues because, if
properly structured and the payments are for the "right"
things, the payment could be exempted from gift tax under
the general exception for directly paying another's medical
expenses.

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Jim Ries wrote:

- quote -

In both cases, the property appears to be the Son's and
therefore Section 121 would not apply. In the first case,
there will be a question about the payment made for the
nursing home expenses and potential gift tax issues.

The implied life estate (which is where I think you are
going) is an estate tax rule only (Section 2036(a)(1)) and
would not seem to impact this.

--
Ed Zollars, CPA
Phoenix, Arizona

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Mom owns her home (has lived there for 10 years) and gives
son a quit claim deed (or gives him house with a retained
life estate.) She continues to live in house and pay all
expenses.

1. Mom moves to nursing home after a year and the house is
sold to pay her expenses. (sale of gift or sale of
residence?)

2. Mom moves to nursing home and the house is sold, but the
son keeps the money.

Both cases mom is still alive.

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