Home Forums Hunting & Shooting Hunter's Campfire reverse mortgage good and bad

Clawback from the government is for any gifts within a set amount of time. Anything prior is untouchable.

Done correctly, one can, over time, give cash and land value (trust or LLC makes land/property much easier) to their family and avoid having medical costs, especially long term care costs for, say, a memory care unit, wipe out a life's savings.

I've paid enough in taxes over my life to be motivated to use all legal means to limit what goes to .gov instead of my family.

Being able to influence how that inheritance is used while still around is icing on the cake.

Edit: last year, you could gift up to 17k tax free to family members. This year it's 18k. If a "family" property is in an LLC or trust, that value, as a percentage of property ownership, can be gifted yearly. So, 51k of value each year could go to three kids equally last year. 34k to two kids etc...

Plan ahead, do it early, and everyone's life is much simpler with less fighting after you die. Bonus if you don't ring up medical debt until you've gifted your value long enough ago that it's all past the clawback period.

Failing to plan is planning to fail

There are tons of ways to help. Contribute to Roth IRAS, set up 529s for grand kids, etc. No one said help/inheritance had to be a brief case of cash for kids to fight over. And no one said you can't live it up AND have enough left over to leave something nice for your kids or grand kids.

Splitting the help vs. inheritance hair is nauseating when the original argument was that kids shouldn't get anything because they're going to dump your ass in the nursing home anyway. That line of reasoning sure evolved as the tide shifted...

What's nauseating is watching you try to comprehend what you read.

The annual exclusion $18k per spouse, so a married couple can give $36k to an individual per year tax free. That's $72k from one couple to another married couple.
No taxes. No reporting. Some specific rules apply to minor grandchildren and pass through. Always best to consult with a tax attorney on those details.
But these payments will show up on banking statements. That matters later on in this scenerio.

The lifetime estate and gift tax exemption is now $13.61 million per individual for 2024 gifts and deaths. This increase means that a married couple can shield a total of $27.22 million without having to pay any federal estate or gift tax. This is separate from the annual exclusion. Must be reported and tracked along with annual IRS tax reporting. Shows up on banking statements as well.

Medicaid only "claws back" when they find violations of their requirements after benefits have been paid out. Usually in an audit performed after a Medicaid recipient passes. You agree to those requirements at the time of application, under potential penalty of law.

The thorough review of the Medicaid application before benefits are granted (while in Medicaid pending status) usually prevents a claw back from occurring.

The 5 year look back is detailed and precise. ALL payments, deposits or withdrawals of $ 5K and up are to be declared and revealed. Receipts are requested. Detailed banking statements must be provided for 60 months prior to the date of application. All income statements, assets, sales of assets, pensions, investments, stock accounts etc...
There is a maximum cash on hand to even apply. My state is $1600. Can not be exceeded in any month benefits are paid out.
The account is subject to continual review to prove benefits eligibility.

If there exists anything found during the application for eligibility investigation, it will result in a penalty by a delay in granting benefits, a specific dollar amount allowed per month for a certain number of months until it equals the penalty.

IRS allowances are not Medicaid allowances.

Want to see a "spend down" on steroids? Go into long term care.

You’re a smart man .

I don’t see the upside to it looks like bad news

Most of us are just waiting to see if you post a thread with photos of your boys titled "Need an inheritance for them"... I'm sure some of the same old buffoons will chip in per usual.

Hahaha!

Boy you sure have learned a lot in a couple months.


Don't let me stop you...tell us some more of what you don't know.

Happens all the time around here.


Old guy hangs on to everything cause he wants to die first and not make any tough decisions.


Then the old bugger goes into the nursing home for 4 years and the "inheritance" gets sold.


Bye bye ranch.

Unfortunately, it happens everywhere.
Planning is a necessary evil. It is never too late.
Pro's and con's of a reverse mortgage are a part of the planning process. Anyone considering one should seek professional counsel.

The old smart ranchers would say that equal isn't fair and fair isn't equal.

At least when it comes to ag land succession.


I still think a RM could be a useful tool.

Who would you go see? A CPA or an attorney?

Both?

An attorney who specializes in probate and elder care law. CPA should be already on board for business management and tax filing.

And you might have to see more than one...

Bob mt. I also wonder about those "reverse mortgages" that I see advertised.
My main "wonder" (concern) is apparently the house goes over to the lending institution when "you" pass away?
Our home has been paid off for decades now and I look forward to leaving it to the VarmintKids and VarmintGrandKids.
I guess if a person had NO heirs they might as well get some cash from their home and live it up while the livin is good?
Hold into the wind
VarmintGuy

Who gets the Varmint Abode, DickVarmit?

Stop acting obtuse, Brother Jim! Keep up the Seagrams diet.

Median length stay in a nursing home for individuals with above average income, is 3 months.

I’m shocked based on personal experience.

They must shove some half dead folks into nursing homes

Bingo. We re-created our trust when I retired in 2015 due to far more net worth than back then and adding the health care bit. We opted for an evergreen option that is updated annually over a three year period. The first year update is all about our health care instruction, the second year is all about the financials (new tax law, etc.) and the third is a reissued trust. My son's met with us and our attorney and fully understand the workings of the trust and are more than pleased, particularly with the health care instruction that leaves them not having to make any decision as we age and die. We pay less than what we pay for our pool boy for this service. Not difficult but very necessary.