Six Things to Consider Before Making Gifts to Grandchildren

Grandparents often are particularly generous to grandchildren as they see their family’s legacy continuing on to a new generation. In many cases, grandparents feel they have ample resources and their children or grandchildren may be struggling financially. Assistance with summer camp fees, college tuition, wedding costs or the downpayment on a first home, can relieve pressure on the next generation and permit grandchildren to take advantage of opportunities that otherwise would be out of reach. Some grandparents also don’t feel it’s right that children and grandchildren should need to wait for an inheritance, when they have more than they need.

Helping out family members is to be encouraged, but can raise a number of legal issues involving taxes and eligibility for public benefits, as well as questions of fairness among family members. Here are six issues grandparents should consider before making gifts to family members:

  • Is it really a gift? Does the grandparent expect anything in return, for example that the funds be repaid or that the money is an advance on the grandchild’s eventual inheritance? In most cases, the answer is “no.”  But if it’s “yes,” this should be made clear, preferably in writing, whether in a letter that goes with the check or, in the case of a loan, a formal promissory note.
  • Is everyone being treated equally? Not all grandchildren have the same financial needs, and grandparents don’t feel equally close to all of their grandchildren. While it’s the grandparent’s money and she can do what she wants with it, if she’s not treating all of her grandchildren equally, she might want to consider whether unequal generosity will create resentment within the family. Many elder law clients say that what they do with their money during their lives is their business. They may help out some children and grandchildren more than others based on need, with the expectation that this will be kept private. But they treat all of their children equally in their estate plan.
  • Beware taxable gifts. While this is academic for most people under today’s tax law, since there’s no gift tax for the first $11.4 million each of us gives away (in 2019), any gift to an individual in excess of $15,000 (in 2019) per year must be reported on a gift tax return. Two grandparents together can give up to $30,000 per recipient per year with no reporting requirement. And there’s no limit or reporting requirement for payments made directly to medical and educational institutions for health care expenses and tuition for others.
  • 529 plans. Many grandparents want to help pay higher education tuition for grandchildren, especially given the incredibly high cost of college and graduate school today. But not all grandchildren are the same age, making it difficult to make sure that they all receive the same grandparental assistance. Some grandchildren may still be in diapers while others are getting their doctorates. A great solution is to fund 529 accounts for each grandchild. These are special accounts that grow tax deferred, the income and growth never taxed as long as the funds are used for higher education expenses. Click here to read more about 529 accounts.
  • Don’t be too generous. Grandparents need to make sure that they keep enough money to pay for their own needs. While small gifts probably won’t make any difference one way or another, too many large gifts can quickly deplete a lifetime of scrimping and saving. It won’t do the family much good if a grandparent is just scraping by because he’s done too much to support his children or grandchildren.
  • Beware the need for long-term care. In terms of making certain that they have kept enough of their own savings, grandparents need to consider the possibility of needing care, whether at home, in assisted living or in a nursing home, all of which can be quite expensive. In addition, those seniors who can’t afford to pay for such care from their own funds need to be aware that any gift can make them ineligible for Medicaid benefits for the following five years.  For details, click here.

There are even more issues to consider that may involve specific family situations. Some grandchildren shouldn’t receive gifts because they will use them for drugs, or the gifts may undermine the parents’ plans for the grandchild or their authority. In some instances, grandparents may want to consider “incentive” trusts, which provide that the funds will be distributed when grandchildren reach certain milestones, such as graduation from college or holding down a job for a period of time. Communication with the middle generation can be key to making certain that gifts achieve the best results for all concerned.

Talk to your attorney about devising the best plan for yourself and for your grandchildren.


Medicare Beneficiaries Need to Know the Difference Between a Wellness Visit and a Physical

Medicare covers preventative care services, including an annual wellness visit. But confusing a wellness visit with a physical could be very costly.

As part of the Affordable Care Act, Medicare beneficiaries receive a free annual wellness visit. At this visit, your doctor, nurse practitioner or physician assistant will generally do the following:

  • Ask you to fill out a health risk assessment questionnaire
  • Update your medical history and current prescriptions
  • Measure your height, weight, blood pressure and body mass index
  • Provide personalized health advice
  • Create a screening schedule for the next 5 to 10 years
  • Screen for cognitive issues

You do not have to pay a deductible for this visit. You may also receive other free preventative services, such as a flu shot.

The confusion arises when a Medicare beneficiary requests an “annual physical” instead of an “annual wellness visit.” During a physical, a doctor may do other tests that are outside of an annual wellness visit, such as check vital signs, perform lung or abdominal exams, test your reflexes, or order urine and blood samples. These services are not offered for free and Medicare beneficiaries will have to pay co-pays and deductibles when they receive a physical. Kaiser Health News recently related the story of a Medicare recipient who had what she assumed was a free physical only to get a $400 bill from her doctor’s office.

Adding to the confusion is that when you first enroll, Medicare covers a “welcome to Medicare” visit with your doctor. To avoid co-pays and deductibles, you need to schedule it within the first 12 months of enrolling in Medicare Part B. The visit covers the same things as the annual wellness visit, but it also covers screenings and flu shots, a vision test, review of risk for depression, the option of creating advance directives, and a written plan, letting you know which screenings, shots, and other preventative services you should get.

To avoid receiving a bill for an annual visit, when you contact your doctor’s office to schedule the appointment, be sure to request an “annual wellness visit” instead of asking for a “physical.” The difference in wording can save you hundreds of dollars. In addition, some Medicare Advantage plans offer a free annual physical, so check with your plan if you are enrolled in one before scheduling.


Cryonics medical research

A new medical study suggests that our brains and consciousness are still functioning after our hearts stop beating. We apparently still have a functioning brain for at least some short time after we are legally dead. This confirms the rationale behind current cryopreservation procedures for the standby team to initiate vitrification as soon as legally permissible. The fact that the brain may still be in good functioning order means a better chance for a successful preservation and revival. For the full story see:

For information on estate planning and cryonics trusts see:

Estate Planning & Elder Law Overview seminar

Estate Planning & Elder Law Overview : seminar by Michael J. Millonig, Attorney At Law, Ohio State Bar Association Board Certified Estate Planning, Trust and Probate Specialist, Certified as an Elder Law Attorney by the National Elder Law Foundation.
Time & Place: Saturday, May 11, 2019, Woodbourne Library, 6600 Far Hills Ave., Centerville OH 45459 @ 1:00 pm to 2:30 PM. Please call for reservations: [937-610-4429]

Maximizing Social Security Survivor’s Benefits

Social Security survivor’s benefits provide a safety net to widows and widowers. But to get the most out of the benefit, you need to know the right time to claim.

While you can claim survivor’s benefits as early as age 60, if you claim benefits before your full retirement age, your benefits will be permanently reduced. If you claim benefits at your full retirement age, you will receive 100 percent of your spouse’s benefit or, if your spouse died before collecting benefits, 100 percent of what your spouse’s benefit would have been at full retirement age. Unlike with retirement benefits, delaying survivor’s benefits longer than your full retirement age will not increase the benefit. If you delay taking retirement benefits past your full retirement age, depending on when you were born your benefit will increase by 6 to 8 percent for every year that you delay up to age 70, in addition to any cost of living increases.

You cannot take both retirement benefits and survivor’s benefits at the same time. When deciding which one to take, you need to compare the two benefits to see which is higher. In some cases, the decision is easy—one benefit is clearly much higher than the other. In other situations, the decision can be a little more complicated and you may want to take your survivor’s benefit before switching to your retirement benefit.

To determine the best strategy, you will need to look at your retirement benefit at your full retirement age as well as at age 70 and compare that to your survivor’s benefit. If your retirement benefit at age 70 will be larger than your survivor’s benefit, it may make sense to claim your survivor’s benefit at your full retirement age. You can then let your retirement benefit continue to grow and switch to the retirement benefit at age 70.

Example: A widow has the option of taking full retirement benefits of $2,000/month or survivor’s benefits of $2,100/month. She can take the survivor’s benefits and let her retirement benefits continue to grow. When she reaches age 70, her retirement benefit will be approximately $2,480/month, and she can switch to retirement benefits. Depending on the widow’s life expectancy, this strategy may make sense even if the survivor’s benefit is smaller than the retirement benefit to begin with.

Keep in mind that divorced spouses are also entitled to survivor’s benefits if they were married for at least 10 years. If you remarry before age 60, you are not entitled to survivor’s benefits, but remarriage after age 60 does not affect benefits. In the case of remarriage, you may need to factor in the new spouse’s spousal benefit when figuring out the best way to maximize benefits.

For more information about when to take Social Security benefits, click here.

For more information about Social Security benefits for spouses, click here.

Tax and other phone scams

The IRS just issued a bulletin warning about tax time phone scams.

The elderly are often the targets of tax and other scams. I hear of these scams often through my clients and their families. One simple way to avoid these scams is to not answer the phone. The older generation grew up in a time when this was not a threat. Answering the phone is a habit and sometimes we feel rude if we don’t answer or hang up. However, that is what you need to do if the caller is not someone you know. Just hang up!

Another way to limit exposure to this problem is to not give out your phone number to everyone who asks for it. It is common for retail stores to ask this and for online orders but you should not give this out. Companies set up their computer systems to require a phone number and the employees are trained to ask for it. I do not give it out and find that they can still continue with the transaction. Companies also sell their customer lists with your phone number and other personal information. Do not give this personal information out. I know some people who give out a false phone number in these situations. I am not advising that but maybe it is easier than going through the process of refusing to give one out. You could also put your phone number on the do not call list although I am not sure if this will stop all the robocalls.

Talk to your parents or other older members of your family to make sure they understand the above.

Report Ranks States on Nursing Home Quality and Shows Families’ Conflicted Views

A new report that combines nursing home quality data with a survey of family members ranks the best and worst states for care and paints a picture of how Americans view nursing homes.

The website analyzed Medicare’s nursing home ratings to identify the states with the best and worst overall nursing home quality ratings. Using Medicare’s five-star nursing home rating system, found that Hawaii nursing homes had the highest overall average ratings (3.93), followed by the District of Columbia (3.89), Florida (3.75), and New Jersey (3.75).  The state with the lowest average rating was Texas (2.68), followed by Oklahoma (2.76), Louisiana (2.80), and Kentucky (2.98). also surveyed 978 people who have family members in a nursing home to determine their impressions about nursing homes. The surveyors found that the family members visited their loved ones in a nursing home an average six times a month, and more than half of those surveyed felt that they did not visit enough. Those who thought they visited enough visited an average of nine times a month. In addition, a little over half felt somewhat to extremely guilty about their loved one being in a nursing home, while slightly less than one-quarter (23 percent) did not feel guilty at all. If the tables were turned, nearly half of the respondents said they would not want their families to send them to a nursing home.

While the survey indicates that the decision to admit a loved one to a nursing home was difficult, a majority (71.3 percent) of respondents felt satisfied with the care their loved ones were receiving. Only 18.1 percent said they were dissatisfied and about 10 percent were neutral. A little over half said that they would like to provide care at home if they could. The most common special request made on behalf of a loved one in a nursing home is for special food. Other common requests include extra attention and environmental accommodations (e.g., room temperature).

To read the full results of the survey, click here.

Balance billing of medical bills

An article from one of the leading healthcare websites discusses the problem of balance billing by hospitals. A balance bill is the amount from the hospital that you are expected to pay out of your pocket after the insurance company has made their payment. This usually only arises when there has been a bill that is not covered, within the policy deductible, co-insurance or out-of-network. Coverage under a policy that is in-network is usually required to be accepted as payment in full by the hospital. The problem is that for these balance bills the hospital uses their list price which is much higher than the contract or allowable price agreed to for in-network providers. The in-network provider must accept this amount.

Under the law of contracts, two parties must reach an agreement or mutual assent on the terms of the contract. For example, you go to get a haircut and the prices are shown or at least told to you prior to your haircut. You don’t just sit down and then they tell you the charge after you are done. Hospital bills should be no different. If there is no prior disclosure or agreement to the charges (e.g., in an emergency), then there is no binding contract or liability to pay an unknown amount. If medical services were provided, there is liability to pay a reasonable amount under the theory of quantum meruit. How do you determine what is a reasonable amount? This issue has been presented in court and at least two courts have ordered hospitals to accept the lower in-network price.

The Kaiser article recommends that if you have this problem you should attempt to negotiate a reduced amount. There are websites that have information on average costs for various medical procedures were you can find proof of a reasonable charge. and

I also recommend that you refer to the Kaiser health site for any information on healthcare or medical insurance. This website is a great resource with lots of information.

Fluffy the Cat & Cryonics

This news story about the revival of a fluffy the frozen cat makes me think about cryonics.  The news story does not indicate that the cat was “legally dead” but it seems it must have been very close. I know from talking to people that most think that cryonics is a far fetched idea. However, stories like this give some hope that revival of cryonics patients will be possible in the future. If you look at all the relevant science and cutting edge technology in development, it is not really that hard to imagine a successful scenario in the future for cyronics.  For more information about cryonics See

Ohio Medicaid Miller Trust developments

In Montgomery Co. Ohio the local caseworkers are starting to give more scrutiny to review of Qualified Income Trusts (aka Miller Trusts) when for the annual Medicaid eligibility review. For more information on these trusts see

Some are demanding copies of all statements for the last year to determine compliance with the transfer to the trust each month. My experience is that many clients are sloppy about getting this done each month. In general, it is a two step process each month: a) transfer all income received in the Medicaid recipient’s personal account to the QIT trust bank account; b) pay this same amount (i.e. patient liability) to the nursing home. If you don’t do this, Medicaid eligibility could be terminated.