Legal Question in Elder Law in Massachusetts
bonds/medicaid
If my mother cashed in her bonds and gave them to her daughter for a downpaymtn on a house and then she has to go in a nursing home within the five year period, am I correct in assuming she will be penalized. Also, would the receiver of the bonds have to claim a capital gain? Thank you, Donna
1 Answer from Attorneys
Re: bonds/medicaid
Hi, Donna --
Your mother would be penalized for the gift only if she APPLIED for MassHealth (Medicaid) coverage within the five-year period. Proceeds on the sale of the bonds would be taxable based on their value as of the date of purchase. A few states (not Massachusetts -- yet) have taken the position that giving the gift back isn't sufficient to cure the transfer.
The smartest thing any elder can do before making a significant gift like this is to sit down with an elder law attorney and review the Medicaid, tax and other issues connected with making gifts.
I've been working in elder law for over a decade -- please feel free to have your mother contact me.
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