Can a person with Power of Attorney over their father’s finances withdraw a large sum of money from the father’s account to gift to the siblings?
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Can a person with Power of Attorney over their father’s finances withdraw a large sum of money from the father’s account to gift to the siblings?
This was the father’s wish before being incapacitated but they were never in writing. If this was done, the father would run out of money in 3 years and would have to be moved from his private care assisted living facility into a state run, state paid facility at that time. We know that this was the father’s wish but don’t know if it is legal since the state would have to be paying for his care when he is moved to his remaining money running out.
Asked on July 11, 2014 under Estate Planning, Illinois
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Unfortunately the transfer will be penalized. Medicaid will look back for transfers made in the previous 60 months before the application for Medicaid is made. Not all transfers will trigger the penalty. The penalty period will not begin until:
- You move to a nursing home
- You have spent down to the asset limit for Medicaid eligibility
- You apply for Medicaid coverage and
- You have been approved for coverage
Transferring assets will not always trigger the penalty. You are exempt if you make the transfer to:
- A spouse
- A blind or disabled child
- A trust for the benefit of a blind or disabled child
- A trust for the sole benefit of a disabled individual under age 65
The Medicaid applicant may transfer his or her home to:
- The applicant's spouse
- A child who is under age 21 or who is blind or disabled
- Into a trust for the sole benefit of a disabled individual under age 65
- A child of the applicant who lived in the house for at least two years and who provides care
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