31 Aug
When planning to help out one’s family members, a person may be so generous as to ignore some basic needs of his or her own. However, one should not be so generous in gifting to one’s children and grandchildren that it depletes what the person needs to survive in the future. Thus, the estate planning process in Texas or elsewhere should not ignore the elder law planning needs that must be incorporated into any strong and effective plan.
Although a grandparent naturally wants in particular to help his or her grandchildren to have all the opportunities and benefits of a good life, large or lavish gifting can interfere with basic elder law concerns. The first concern, then, is to set up the basics of long-term care planning for the individual prior to deciding what gifts to give to one’s grandchildren or other family. The huge expenses involved in long-term care in assisted living quarters or in a nursing home should not be ignored.
Another thing to watch for is the rule that a gift within the past five years could prevent one from receiving Medicaid. Under current laws, Medicaid is a vital tool in planning for long-term care. This makes it prudent to consult with an elder law attorney regarding the need for Medicaid planning. Gifting to one’s family does not have to be sacrificed, because often, elder law planning will succeed in saving certain critical assets for the children and grandchildren, instead of turning them over to nursing homes or government agencies.
Therefore, the need for long-term care may make certain large gifts to grandchildren or others ultimately detrimental to everyone’s interests. After all, strapping one’s family members with worries of nursing home or assisted living expenses is the worst outcome to imagine. The answer in Texas and elsewhere is generally to combine elder law considerations into the estate planning process for a more complete and rounded approach, which will protect the individual and the family from unnecessary worries over long-term care.
Source: ElderLawAnswers, “Six Things to Consider Before Making Gifts to Grandchildren“, , Aug. 28, 2014