DEAR BRUCE: I have a question regarding the five-year look back period. My mother has all her faculties but has cancer. She lives with me and has about $80,000 in an account with her name and mine. Two years ago, I moved it to an account with just my and my husband's name, and she is totally aware of this. She wanted to gift myself and my brother the allotted amount for 2008 and 2009, but my lawyer said no, to see an elder-care lawyer. I have contacted one, but he never replied. My question is, what is stopping her from gifting us? We don't understand because what if she wanted to go to a casino and gamble most of it away? It's still her money. We live in Rhode Island, and I really would like you to please respond to us on this confusing matter. -- L.L., via e-mail
DEAR L.L.: You mentioned that two years ago you put the money into an account with your husband, which your mother was aware. This is when the gift took place. She has no money to give since it is yours now. You are getting close to having satisfied the "look back" period, so if you mom does require care, the money will be "safe" from your state. You mentioned that if she wanted to go to a casino, she could do so. Not without your permission, because it is your money, not her money. Let me repeat that -- since the money went into your account two years ago, in your name, it is your money. What you should do is file an amended tax return and let her claim against her lifetime estate so that the gift taxes, which otherwise would be due, are not. That could be a costly adventure, so I would see an accountant. I don't understand what your lawyer is talking about. Your mom doesn't have any money if everything is as you presented it.
DEAR BRUCE: I own a home, an RV and a small ranch. My income is non-taxable! However, I pay thousands in interest on each of these entities. Yet, I cannot recoup any of this money. Does this seem fair, and why? -- Retired Veteran,, via e-mail
DEAR VET: I'm not sure what your complaint is. You're saying that you're paying interest because you choose to finance a home, RV and a small ranch. Your complaint seems to be that since you don't pay any taxes, you can't deduct it like other people. The answer there, my friend, is to go out and get a good, heavy taxable income, and then you may have some deductions. Maybe yes, maybe no. A lot of people would envy your position. The reality is that you cannot have tax deductions when you don't pay any taxes.
DEAR BRUCE: I was told that I could get my ex-husband's Social Security benefits. We were married for 33 years and divorced. He remarried and moved to Florida. Sad to report he was in a home with Alzheimer's and just recently passed away from heart failure. He was 63. We have two grown children and I have never remarried. He, on the other hand, did remarry, but they were married only nine years. I am currently employed full-time and will be 61 soon. -- J.R., via e-mail
DEAR J.R.: You should contact the Social Security Administration, since you are still not old enough to collect under his account. Furthermore, you will be required to collect under your own first and then his as a secondary claim. That having been observed, you were married for more than 10 years, and the fact that your divorce has no impact on your ability to claim against your account. Further, his second wife can claim as well even though they were only married nine years and she was the wife at his demise. This should not be all that complicated. You might even be able to get it done in writing. If it were me I would make an appointment with the local Social Security office and everything will be explained to you. You are eligible to collect on his account, but only after your own earnings have been taken into account.