July 12, 2016
One Option to Pay for Long-term Care: The Kids Pay.
Life expectancies in the U.S. have gone up again. According to the National Center for Health Statistics, women are living to an average of 81.1 years, and men to an average of 76.3. While living longer is wonderful news, most people do not have the savings in place to cover all of their costs into their late seventies and eighties – and beyond.
More and more, elder law and estate planning attorneys are seeing clients worried about their financial futures. And adult children are increasingly worried about how to help care for their elderly parents. How to help?
If you are the adult child of someone and you want to help them financially, there are several things you can do. If you have extra funds, you can give your parent as much as $14,000 tax-exempt, every year. If you and your spouse wish you can make a joint gift of as much as $28,000 to each parent. This annual gift can be a way to help with much-needed funds. But that annual gift will likely make your parent or parents ineligible for benefits such as Supplemental Security Income and Medicaid. Your parent can have no more than $2,000 in assets to order to qualify for Medicaid.
If giving a lump sum is an issue, you can help out by directly paying bills. Paying a bill for your parent is allowed under tax law: If the payment is made to the doctor, nursing facility or hospital, it doesn’t count as a gift.
There are other ways to help the elders in your life, as well. Please contact me and together we can work together to help your loved ones.