tax for that. However, if that $16,000 gift was made within the five year look-back period and you planned on qualifying for Medicaid, it would become a huge problem. Even though the gift is tax free, it could cause penalties regarding Medicaid eligibility.
Myth #5 You want to keep things simple by giving away your assets or putting them in your kids’ names.
This is not effective planning because by putting the children on those accounts as well as yourself, you haven’t actually done anything to get those assets out of your name for the purposes of Medicaid planning. The other option is more deceiving because technically you could give everything to your kids today as long as you get past the five-year look-back period. In a perfect world it may work and be simple. However, typically this strategy often gets more complicated. There are hundreds of things that could go wrong with keeping it simple. For example, if your kids were to pass away while owning your assets, this could end up being your daughter-in-law’s house instead of your house. If you had money left in your kids’ names and they passed away, it could actually end up being your minor grandchildren’s assets now that you’re not going to be able to get back. By doing these types of transfers, while they may be simple, you lose the ability to control your assets.
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