Legal Question in Elder Law in New York

Re: Elder Law and Gifted Money

What's done is done with respect to mom's gift to her children. Hard to see how such a small amount of money in your brother's bank account will significantly impact his child's financial aid application; sounds odd, but I don't really know. If it were $120,000; maybe, but $12,000?

I think too if he gave the money to your sister, the financial aid application probably has a question anyway asking whether any money was transferred, so that may not help his goal. It seems to me your brother should be able to exclude the $12,000 from the financial aid application on the grounds that he's holding the money in a constructive trust for mom; it's not really his money until mom passes, because it may be needed for her benefit, or to repay to Medicaid. If he goes that route, make sure he discloses what he's doing on the application. But this is just speculation on my part; I don't really know the college financial aid process; just an idea for you guys to consider. Yes, a paper trail is always created, but in any event you most definitely do not want to make a false statement in any way, shape, or form, either on the financial aid application or the Medicaid application.

If your brother wants to get the money out of his account for financial aid purposes, I agree he should transfer it to your sister and not back to mom. Make sure your sister doesn't spend the money in case Medicaid comes back looking for the money down the road; who knows? Why give the money back to mom? So she can pay it over to the nursing home for a month's care?

This a complicated area of the law, as you know, and in every case there are exceptions to general questions. Especially where, as in Medicaid planning, there are so many factors and nuances to consider. Point being, I know you're looking for a nice, definitive answer to your question, but I really can't provide one because there are just too many other questions to be asked and answered, and that can't be done through email.

Good luck.

Rick Bryan

New York, NY