Q&A: Giving a gift without strings

Dear Liz: My brother and his wife are living modestly on Social Security and delivering for a food service. Occasionally, I send him some money when I can. I have some money put aside and am able to send him about $5,000 now instead of leaving it to him in my will. (He is six years older.) I am afraid that he and his wife may spend it on a trip or frivolity and will not put it aside for home health or nursing care when they need it. Your thoughts?

Answer: Please make the gift and hope that they do spend it on a trip or something else fun.

According to the U.S. Department of Health and Human Services, someone turning 65 today has about a 70% chance of needing long-term care services. Women typically need care for 3.7 years on average while men need 2.2 years of care.

Medicare, the government healthcare program for people 65 and older, typically doesn’t pay for nursing home and other custodial care expenses. However, Medicaid — the government health insurance program for the poor — does. If your brother and his wife do need custodial care, chances are good they will quickly run through their assets and wind up poor enough that Medicaid will pick up the bills.

The amount you can give them wouldn’t make much of a dent in the bill if they need potentially expensive custodial care someday. Your $5,000 gift would pay for about a month of an in-home health aid, and a couple of weeks in a typical nursing home.

But $5,000 could go a long way in delivering a memorable experience while they still have the health and energy to enjoy it.