Recently, clients have asked this persistent question "If an elderly parent goes into a nursing home, will "gift of stocks" paid to either the son or daughter have to be forfeited to pay his nursing-home bills?"

The son or daughter of the elderly parent would not specifically have to give up the stock, but, would be responsible to help pay for the elderly parents nursing-home costs if the elderly parent ends up needing the nursing home care and is not in a position to pay these bills.

If a elderly parent goes into a nursing home and spends most all of their savings and other asset, then generally, Medicaid could end up covering the costs. But if that happens, the gift may make a difference, because under the current strict laws giving away or gifting assets within five years of applying for Medicaid can delay an individual's eligibility.

For example, lets assume that your Mother transferred or gifted away $40,000to her daughter and ends up applying for Medicaid within the next five years, and furthermore, lets assume that the average nursing-home stay in her state costs $4,000 per month. The Mother wouldn't be eligible for Medicaid benefits for the first 10.0 months after applying ($40,000 divided by $4,000).

The current Medicaid rules state the Elderly Mother can only apply for Medicaid after exhausting most of her other assets. The daughter, then would need to find some other way to pay for that care. The State will not force the return of the gift, but it might mean that the daughter would have to find some way to pay the Nursing home bills before Medicaid can kick in and from a practical point, that might means utilizing some of the monies gifted, that is $40,000.

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