Question: Four years ago, my husband and I lent our son $110,000 when he was going through his third divorce in order to pay his past-due child support, his lawyer, his former wife’s alimony, and to keep him out of jail. He promised to repay us as soon as he “got on his feet”. Even though we delicately remind him several times a year, he always sloughs it off. We are both in our late 70’s and, in addition to needing the money, letting him get away with this is not fair to our other two children. He has recently married for a fourth time and, believe it or not, he continues to live way beyond his means. Is there anything we can do short of suing him? If not, what is the best way to even out things with our other children?

Answer: Assuming you did not get a written promissory note from your son that memorialized the loan transaction and established the terms of repayment, we wouldn’t hold our breath waiting for your son’s ship to come in. But repayment is not the only issue you must consider. By making a loan of this size, you may well be taxed by the IRS for the interest your son should have been paying you.

Based on IRS long-term loan rates that are computed each month, this is called “imputed interest”. If, for example, the rate is four percent, $4,400 each year could be added to your income when you don’t have the asset with which to earn money – a true double whammy.

And to make matters worse, your estate plan may suffer. For example, if you think that you might consider the loan as a gift to your son, don’t forget that you will have to file a gift tax return and may well end up using part of your unified credit – which could mean more estate taxes.

Given the variety of tax difficulties you may face because of your good deed, we suggest that you again approach your son about making arrangements for repayment. Assuming he can’t or won’t, seek competent tax and legal advice, change your wills to make sure your other children are treated fairly, and don’t name this son as personal representative of your estate or to any other position of trust.

Question: Our mother was discharged to a nursing home for rehabilitation after her stroke, and the facility was only too happy to take her. In fact, we were downright impressed with the kindness shown to us. We were told by the nursing home that because she had Medicare and Medigap, there would be no cost to the family for 100 days; however, because the doctors told us she would be bedridden for the rest of her life and because she only had $6,000 to her name, we became concerned about what would happen after her Medicare ran out. The facility knew about her financial plight and advised us to wait and see how she did with her therapy.

Everything was fine until I received a call from the nursing home and was told that we had to pick up Mom because Medicare would not cover her rehabilitation any longer because she had reached maximum improvement. Not knowing what to do, we picked her up and took her home with us. After six weeks, we recognize that she needs skilled care, but we can’t find a nursing home to take her. What can we do?

Answer: You’ve got a problem that cannot be easily solved. First of all, the nursing facility was happy to take your mother because Medicare reimbursement rates are greater than private pay rates; however, when it appeared that the Medicare gravy train was running out, the facility made a business decision that it did not want your mother as a Medicaid patient because Medicaid reimbursement is less than the private pay rate. Believing that you would not know any better, they told you to come and pick her up – which you did. If you had not picked her up, the facility could not have discharged her without giving you 30 days’ notice -- during which time you could have applied for Medicaid.

Taking the NextStep: You are going to have a very difficult time getting your mother admitted to a nursing facility as a Medicaid patient without a promise of private pay for a period of time. Since your mother does not have the money, it must come from the family. Because the discharge planning and admissions processes place you and the facilities in a financially conflicting position, you must have an independent advocate to advise you. We suggest that you now seek the professional help that you should have sought before your mother left the hospital.