Dear Liz: My mom has BP stock. Currently she is moving toward applying for Medicaid to pay for nursing home expenses, and I was advised to put the stock in my name. Now I am watching her stock (and savings) plummet. It’s gone from a $100,000 savings to about $40,000 currently. Do I take it out, or do you think it will come back and I should leave it alone?
Answer: You may want to cash out at least some of the stock to hire a good elder law attorney who can advise you about the Medicaid look-back rules.
These rules are designed to prevent what you seem to be doing, which is trying to hide assets from the government by transferring them away from the potential Medicaid recipient. Medicaid is the government-run healthcare program for the poor, and recipients are supposed to have exhausted their assets before they apply. Any transfers made within five years of applying for Medicaid will delay eligibility.
As for your original question, having more than 10% of one’s assets in a single stock is extremely unwise, and you shouldn’t have any money invested in stocks if you’re likely to need it within the next 10 years. After you’ve consulted with an elder law attorney you might also want to make appointments with a tax pro and a financial planner so your mom can better manage what she has left.