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Good comments above. Here are some more:
1. Do you have a Durable Power of Attorney (and Health Care Surrogate)? If so, you are legally empowered to assist your father with all of these matters whether he is competent or not or whether he pays you or not. If you do not, get one ASAP or you will be faced with BIG headaches if Dad becomes cognitively incompetent.
2. Is Dad on Medicaid or do you anticipate applying for public benefits? If so, the comments with respect to gifting are important. The tax issues are not of great importance (to me) but establishing the relationship contractually from a public benefit eligibility point of view is very important. If not handled properly the transactions may cause a stumbling block to eligibility.
3. Do not confuse gifting restrictions with respect to public benefit eligibility with Federal Unified Gift and Estate Exemptions. The amount you are permitted to gift to as many as you wish annually is ONLY with respect to gift tax exemptions and has NOTHING to do with public benefit eligibility.
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Your question raises both legal and ethical questions. Legally, you need to be concerned with taxes and issues if someone deems that you've overpaid yourself in money or goods. Any overpayment might be construed as elder abuse. If your father agrees to pay you, then set an hourly rate, track it and issue an invoice to him - or agree on a monthly rate for specific services. You should be responsible for paying income taxes to the state and federal IRS for the amounts paid by him to you. Should you fail to pay taxes, the likelihood that someone ever audits you to discover these payments and non-payment of taxes is small but one never knows so be prepared to do the right thing. It's best to pay quarterly estimated taxes as you're earning money for helping your dad. This way, you're paying as you go. Remember that you might be penalized for failing to make quarterly estimated tax payments. See a tax accountant or your state web pay for self employment taxes.

Should your father need medicaide there is a look back period between 3-7 years depending on the state where he lives. If he's "paid" you reasonable amounts on a regular basis, it's generally not a big deal. But, if he's shelled out large sums during that time, he might be disqualified for state aid (medicaide) for a limited time. Ethically - is it a good idea? Will other family members object or expect to be paid for their assistance to him? What they deem reasonable payments might be very different from your opinions. I am a Power of Attorney for my Mom and I'm a co-owner on her checking, savings and investments. I could take half of everything but I do not. I choose to reimburse myself or other family members ONLY for some higher priced items related to her care and we all agree on it. She and my father worked hard so it should ALL be used for her care and comfort. I would strongly suggest that if you suspect your siblings would be upset then don't do this. Maintaining your family relationships beyond your fathers life may be more important to you than the arguments this might cause. Good luck.
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jessica,
Try rephrasing your question this way:
Q: Can my father give me a $ gift as a thank-you for helping him with his financial affairs?
A: Verify this with a tax accountant or an IRS agent, but I believe your father is allowed to give tax exempt gifts to blood relatives up to $10,000 per year. The only caveat is that if your father should require Long Term Care that is not currently covered by Insurance or Medicare, then the government can "clawback" any gifts given to you during the 5-7 year period prior to his placement in a facility that is paid for by the government. (This law is intended to prevent elderly from giving away their estate and claiming poverty to obtain government assistance.) An Elder Law or Estate Attorney can advise on this but if you do it properly, it is a much better solution than having your father "hire" you to handle his financial affairs. Unless you yourself have a background in Elder Law and/or Estate Planning you would be biting off more than you could possibly chew by taking on that role.
LynnPO is right on about the legal and moral issues of "working" for your father. But there is nothing preventing your father from recognizing your "helpful assistance" with a financial gift of appreciation ;-)
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It's $13,000.00 per year, per person without tax consequences. That's a gift. Now, a separate issue, why would you want to accept money from your father to "manage" his financial affairs? Does this "management" include buying and selling stocks and bonds? Meeting with Annuity consultants for adjustments? or just paying his monthly bills and making his monthly deposits (big difference).
Umm.
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I appreciate the above comments! Thanks! To clarify my situation a bit - My father is 92 and now resides in a long term care facility. I have been his caregiver for several years. I manage all his financial affairs which includes dealing with medicare and health insurance providers, handling his annuity, completing admission forms for various health care facilities, organizing tax information, and all bill paying. I do have one brother who has told me that if I wanted him to take on the responsibility he would just hand everything over to his accountant who would be paid from Dad's funds. The small amount that I would receive would mainly offset the cost of the expenses to handle his affairs and also to reimburse me for clothing, OTC medications, personal articles, etc.
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Thanks for the additional info - you've been given a lot to think about but I'll just add a few more thoughts... Unless your fathers business affairs are really complex, and if you're willing to handle his business don't waste the $$ on an accountant. If it causes you too much stress - if you get to the point that you can't be happy and loving with your family and a good companion to your dad - save yourself the worry, hire the accountant. Being a good daughter is about having a good relationship to your dad, hiring an accountant doesn't make you a bad daughter and wanting to cover your expenses doesn't make you a bad daughter either. Many people feel that we should willingly give our parents time, attention and financial and physical support during their elderly years without expecting anything in return. I feel the same to a point. My credo has been "help Mom but not to the point that it puts me in debt or jeopardizes my own ability to save for retirement." She would not want me to go into debt. So - the decision is really up to you. I suggest automating as much as you can to reduce the time you put in - auto pay bills for insurance, pharmacy, rent - this will reduce your time and ensure things are paid on time. If your dad must pay estimated quarterly taxes on interest income, you might be able to automate payment of that as well. Talk with your dad's banking institution. Use the services provided by the assisted living center as much as possible - transport to doctor visits, shopping assistance - anything as long as fees are reasonable and it saves your time and is safer for him. Call service providers to see what they can do to help. Here's an example: my mom takes OTC vitamins and the pharmacy delivers them monthly along with her prescription meds. They bubble pack them per the requirements of the assisted living center. This saves $ because they charge me OTC prices for the vitamins and bill her insurance for the prescription meds; saves my time because I don't have to run to the pharmacy & deliver the vitamins. I buy personal items for her up to $200 a month, anything over that, I reimburse myself from her savings. Should your dad need anything related to his ability to live independently, always ask the assisted living staff to see if medicare or his insurance will cover the cost before using his money to pay for it. This saves your time because the ALF staff will get a faster response from the insurer and saves his $$.
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You are allowed to work for your father.
Alot of people work for their father's.
Just claim it as income.
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First let me say, my Mom has never worked, my Dad set up his retirement so that she would always receive a monthly check and GREAT health ins. including dental and vision. He also bought several annuities for "just in case". He died in 1996, all of the" just in case" money is still building interest. She also receives SS (on his work record) as a spouse. She is now 88 and has dementia. My wife does everything for her. Pay bills, take her to Dr.s, the grocery store, to get her hair done. Bath her, cook for her, do laundry, order her meds, give them to her 2 times a day. Keep house clean, has yard cut and anything else that needs to be done. My 2 sisters don't do anything but visit once a month-or less. I have power(S) of attorney, general, health, finances etc. I went to an eldercare attorney. He wrote up a contract for us to receive a caregiver fee $1,000 monthly. I have to issue myself a 1099 misc for the money, I also have to pay taxes quarterly on it. If she should happened to get so bad that we have to put her into a nursing home and it gets to the point where her money runs out and she needs gov. assistance we are protected from having to pay this back. We will also have to show where her money has gone, gifts etc. They can come back and demand gifts are given back before she could get any assistance from the gov.
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