WTB Free Legal Advice! Languish (US) Lawyers to Me!

[Berkut]

Actually, I don't even know if the Languish lawyer crowd can help with this, but I said I would ask, so here goes.


My sister in law was recently diagnosed with stage IV lung and brain cancer. She was previously a near minimum wage employee at a local school cafeteria. Single mom of 4 (now grown) kids.


So anyway, needless to say, she has no health insurance, and now she cannot work.


She is going to apply for SSI and Medicaid of course, and in New York, she should be ok to get Medicaid at least.


But of course Medicaid won't pay the taxes on her house, or her electric bill, and she is starting chemo, so she cannot work.


She is going to get help from family, but a bunch of us are putting together a benefit for her - she is well known in her community, and we expect to be able to raise some amount of money for her, hopefully.


So we set up a benefit website for her, and opened up a paypal account so people could donate to it, and linked said account to the benefit bank account opened for her as well.


So far, so good.


But now everyone is starting to freak out, as her family is won't to do, over the legal ramifications of all this.


Is the money collected taxable income for her?
Will any money collected simply be seized by Medicaid to offset her already 6 figure medical bills?
Will this money mean she cannot get SSI?
Will this money mean she won't qualify for medicaid at all?


Some of her family, who shall remain nameless, had the bright idea of just not linker her name to the paypal account or the bank account. That is, IMO, kind of stupid, especially given that we don't even know what the tax and legal status of anything of this is, but it is almost certainly the case that attempting to "hide" where the money is going most certainly CAN get people in trouble.


I know what the right answer is, and it is what I've already suggested: We need to simply ask a local lawyer what her/our options are, and how to shield her assets most effectively.


But everyone is getting a bit hysterical, everyone is super stressed out of course with worry, and people are already talking about how she is going to lose her house. Hell, I don't think a primary residence is ever considered an asset when it comes to things like this...but who knows. Anyway, the other concern seems to be that if we get a lawyer involved they will


1) Take most of the money in fees anyway, and
2) Constrain the more "liberal" members of the familly from their idiotic plans to "hide the money".


If anyone knows anything about this stuff and can help with any pointers, that would be pretty great. If not, that is understandable as well - this seems like kind of specialized knowledge.

[alfred russel]

Berkut, I can't help much with this other than to say good luck, but as a CPA who knows about zero about personal taxes, and doesn't work with them at all, I think they are good questions. However, gift income is generally not taxable.

I don't know anything about qualifying for SSI or Medicaid, but talking to someone in the offices should be able to help. The hospital should also be able to help (as this situation comes up a lot and they have an interest in getting paid). However, she will have no taxable income, and her assets will be less than her liabilites (once she gets a bill or two).

If anyone wants to give a lot of money, it may be worth talking to a tax person. Not so much from her perspective, but from the giver's. The amounts people are donating to her are not deductible and there are limits to how much you can give before having to pay extra taxes. There may be arrangements (such as bills paid directly to the hospital) where the givers could be made better off (which could encourage them to give more).

To be clear, I'm not knowledgeable on this stuff and don't make decisions off of anything I'm posting here. I'm actually not sure that a lawyer is the right answer. A CPA that works with personal tax and finance issues might be better (definitely not me). I really think the hospital finance department would be the best part to start talking to someone on this though.

[alfred russel]

So Berkut, to revisit, this...And keep in mind that my knowledge of tax comes from a couple classes I took in college probably when I was still posting as Dorsey, and I failed the tax section of the CPA exam twice...

If I give you $500, neither of us has a change in taxable income.

If I give you $500,000, you still don't have taxable income, but I'm going to get hit with gift taxes (the giver pays, not the receiver).

I'd be worried though about flippantly setting up a paypal account especially because of the impact on the giver. There are probably ways around the gift tax issue (I don't know if anyone will give that much), and there might be some way to structure the giving to be tax deductible (I would be a bit surprised though).

As far as SSI and Medicaid, I have no clue what their criteria are. However, if the question form asks for her income, I think the answer is $0. If they ask for her assets, she might have $10,000 in a paypal account that she would need to declare, but I'm sure she also has a small fortune in medical bills. She is insolvent, she has no income, and she is unable to work because of a medical condition. If there is any sense in the programs, she will qualify.

But to reiterate, talk to someone who knows, because I don't.

[Berkut]

Thanks Dorsey.

What you've said so far actually lines up pretty closely with what I've found just kind of googling around.

And you are also correct about the hospital being a great resource for getting her setup with Medicaid - of course, they want to get some renumeration for her treatment. I've actually been very impressed so far with their approach. They've been, so far as I can tell, very good about separating the questions of how to treat her from the questions of how to pay for that treatment. The approach seems to be to get her the best possible care, THEN worry about how to get some of that care paid for...

The questions we have right now are mostly around how to handle the benefit, and what the right way to manage that money is without it making things worse.

I don't even know how much we are even talking about. I am guessing it is something on the order of thousands of dollars at best.

[alfred russel]

Hopefully your sister isn't having to spend too much time worrying about finances. It is kind of crappy that the financial disaster of your life coincides with the moment you really have other things to focus on.

[Berkut]

Hopefully your sister isn't having to spend too much time worrying about finances. It is kind of crappy that the financial disaster of your life coincides with the moment you really have other things to focus on.

That is exactly the problem for everyone.

She has what is, let's be honest, a terminal illness. I have no idea what her long term prognosis is, but it isn't great.

How to handle the financial part of it is just something that nobody is really prepared to deal with, and IMO it is allowing some people who have no business having an opinion to interject themselves. But how do you tell family to STFU if you don't actually know anything useful at a time like this?

Too many people with opinions who don't know what the hell they are talking about, even if they do mean well.

I am pushing towards just getting some legal advice, and I would be happy to pay for a simple consultation myself.

[sbr]

I know that my parent can each give me ~13K in gifts with no tax issues each year.  I don't know if that is a specific parent/offspring amount or a generic tax free gift to anyone amount.

[alfred russel]

I know that my parent can each give me ~13K in gifts with no tax issues each year.  I don't know if that is a specific parent/offspring amount or a generic tax free gift to anyone amount.

I think that is the rough limit that can be given to anyone without hitting gift taxes, but some of those rules add up. So if I gave Berkut $13k and then donated $500 to his sister, I might hit gift taxes (if the limit is $13k).

[Ideologue]

It's been forever since I studied it, so someone with more experience should weigh in--and you really need to get a local attorney to look diligently into this even if someone on Languish is a VA attorney, which I don't think they are (Ulmont?).

However, all that said, just throwing it out there: I suspect there might be a way to establish a charitable trust with your sister-in-law as the beneficiary, and you (or your local atty, or whoever) as the trustee.

[dps]

At the very least, don't let the relatives try to hide where any donations are coming from or going to. 

[DGuller]

My thoughts are with your family. 

As for the question, my guess is that the SSI aspect should be the bigger concern.  It is a means-tested program, and it's hard to know without reading through all the literature as to what the government considers as sufficient means to not need their help.  From what I remember, some of the requirements are ridiculously low due to not being adjusted for inflation since probably their inception.

[Queequeg]

Berkut, I feel impolitic asking, but how long will she realistically have to support herself in addition to medical costs?  Unless both tumors are operable and there's no proof of lymph node metastasis (seems unlikely), I'd think this was much more a question of when? 

This is truly awful, though.  My thoughts are also with your family.  I can't imagine a worse way to die than brain cancer.

[Maladict]

Too many people with opinions who don't know what the hell they are talking about, even if they do mean well.

I am pushing towards just getting some legal advice, and I would be happy to pay for a simple consultation myself.

Sorry to hear about the situation. 
I'd advise you to get an expert involved. This is how family feuds start, you don't want that on top of eveything else.

[stjaba]

I am not a tax lawyer and this is not legal advice. But I would refer you to the following IRS website: http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes

First note that the annual exclusion for gifts is now $14,000. Unless you have a bunch of really generous people in your family, the donors shouldn't worry about that too much (and like Dorsey mentioned gift income is not taxable from the perspective of the donee). Also, there is an exclusion for money paid towards medical expenses, but I believe that the money has to be directly paid to the medical provider for that exclusion to apply.

The Medicaid/SSI issues are more complicated. In the event that the right to Medicaid/SSI benefits are based on some sort of assets/means test, it might make sense to set up a trust so that the donated funds are not in your sister-in-law's name and are in the name of a trustee instead. However, the relevant government regulations might account for trust assets and if so a trust would not be helpful from that perspective.

[Caliga]

I can't offer you any advice, but I did want to say I am sorry to hear about your situation.

By an odd coincidence, a friend of a friend was diagnosed with the exact same thing last week.