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Jewish World Review
March 20, 2006
/ 20 Adar, 5766
Independent living the antidote for homelessness
By
Jan L. Warner & Jan Collins
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http://www.JewishWorldReview.com |
Q: I am 82 and in fairly good health. At my daughter's suggestion, I began living with her and her husband shortly after my wife died 10 years ago. Since they offered to add a small apartment onto their home to make me comfortable, I made a gift to my daughter of $85,000 to cover the construction and expense of furniture and appliances. My accountant told me that because of the size of the gift, I would have to file a gift tax return, which I did. Since then, I have paid my daughter and son-in-law $750 each month for my share of the food and utilities, etc. Otherwise, I pay my other expenses. I have a son who lives with his wife and two children about 800 miles away, and he visits and calls only occasionally.
I thought things were going OK until my son-in-law told me last week that he and my daughter were planning to sell the house and move to a smaller place, and that I would have to go to assisted living or live with my son. To make things worse, he told me that I had put a strain on their marriage, something I tried very hard not to do.
When I gave my daughter the money, I thought I would be able to stay with her until I got so bad that I needed to be cared for in a nursing home. Since I still drive, take no medicine and exercise every day, I am far from needing a nursing home. My Social Security and retirement income is $2,500 monthly, and I have better than $225,000 in certificates of deposit. My son (who says he can't take me in because he has no room) says that I should get my $85,000 back from my daughter. I have no close friends in the area and feel that I have nowhere to turn. I am afraid that if I go into assisted living, I will lose my abilities before my time. I know I will have to sign a new will and power of attorney. I never expected to be homeless at my age.
A: Based on your good health and independence, we see no need for you to even consider an assisted-living facility today. Instead, you should check out independent senior living facilities and communities in your area, where you can probably find a suitable apartment, condominium or even a patio home, depending on the layout of the community. There, you will be able to mix with folks your own age who, like you, are still very independent and have their abilities, as you put it. Choosing a senior community that best fits your needs and pocketbook is a task that requires a lot of planning. You will probably want to take tours of the various campuses in your locale and even spend the weekend to acclimate yourself. If you feel lost and would like some help, we suggest you contact a professional geriatric care manager by visiting the National Association of Professional Geriatric Care Managers' Web site at www.caremanager.org.
From what you describe, your son's idea about getting reimbursement from your daughter has no legal foundation. This means that if your daughter and her husband voluntarily give you one nickel, it will be a gift. And if it is gift, to the extent you receive more than $12,000 in any one year from either of them, or more than $24,000 from both of them, they will be required to file a gift tax return.
Here, you made an absolute gift to your daughter of $85,000 with no strings attached. The "agreement" you felt you had with your daughter was not a written condition of the transfer of your funds. Plus, you filed a federal gift tax return.
Even if you are dealing with family, don't think you won't need that written agreement. Because of situations like this — which are becoming more and more prevalent — a written agreement setting out what each person involved expects and will receive should be signed by all interested persons.
With your income and remaining assets, you should have no problem affording a comfortable independent living environment. If you and your daughter are still getting along otherwise, there would be no real reason to change your powers of attorney; however, if you are not, you should consider the replacement carefully. Since your son lives far away and has little contact with you, your daughter may still be the best choice. However, make sure your power of attorney does not become effective unless and until you are incapacitated (called a springing durable power of attorney) and, under these circumstances, since you want to make sure all the rest of your money is available for your care, we suggest that there be no gifting authority granted to your agent. And one last thing: Had you contacted an elder law attorney before forking over $85,000, we can think of at least two ways in which you — and your money — would have been protected.
Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JAN L. WARNER received his A.B. and J.D. degrees from the University of South Carolina and earned a Master of Legal Letters (L.L.M.) in Taxation from the Emory University School of Law in Atlanta, Georgia. He is a frequent lecturer at legal education and public information programs throughout the United States. His articles have been published in national and state legal publications. Jan Collins began co-authoring Flying SoloŽ in 1989. She has more than 27 years of experience as a journalist, writer, and editor. To comment or ask a question, please click here.
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