The Lawyer Wannabes Are Wrong
Jenny has a mentally unstable aunt on Medicaid inheriting $100,000 from her father. Jenny’s uncle wants his sister to gift the money to Jenny’s mom and have her dole it out to the aunt.
QUESTION: Jenny in Atlanta has a 63-year-old mentally unstable aunt on Medicaid. She lives in government housing. She is inheriting $100,000 from her father. She can’t inherit the money and remain on Medicaid. Jenny’s uncle wants his sister to gift the money to Jenny’s mom and have her dole it out to the aunt. Dave strongly advises against it because it’s illegal.
ANSWER: It’s absolutely not legal. It’s called Medicaid fraud. It’s a federal offense, and they will put your butt in jail when you start hiding stuff from the government in order to qualify for welfare.
I will give you one honest and legal method that might work, and you should check with an elder law attorney or an estate planning attorney before you execute this idea from a radio guy. Ask the attorney if there is a way that the money could just be given to one of the relatives—never given to this lady. If it goes straight to your mom and never goes through the aunt’s name, then your aunt never received any money. That might be legal. But if it ever goes into your aunt’s name and goes back out of her name by any methodology, the government is going to come scarf that money back—at a minimum. At a maximum, they’re going to come after your butt. If the money is ever put in the aunt’s name, it is then hers. Anything you do with that up until five years ago can be undone in the case of Medicaid. It cannot go into her name; if it does, it will go to Medicaid.
Basically, we’re changing who’s going to get the money. Please do not allow these people to put the money into the aunt’s name and then take it back out of her name and call that hiding it. That is going to get you guys in a world of hurt. They have no idea what they’re talking about.