The Child Caretaker Exception: A Little Known Rule to Protect Your House from Medicaid
October 18th, 2016
If you have looked into nursing home care for a loved one, you know that the cost of care in a facility is so costly that few people can afford to pay for it out of pocket for very long. As a result, many people must "spend down" assets in order to become eligible for Medicaid to pay their nursing home expenses.
If the thought of dissipating the fruits of a lifetime's work in a matter of months is repugnant to you, you're not alone. Most people work hard in order to pass their assets on to loved ones. Medicaid is aware of this, and has established a five-year "look-back" period to make sure that people do not transfer away their assets in order to qualify for benefits.
However, there are some transfers that are permitted under law, allowing families to keep assets while elderly loved ones qualify for the care they need. One of these involves the child caretaker exception.
What is the Child Caretaker Exception?
Any family that anticipates a parent may someday need nursing home care should consider long-term care planning, in which the use of the child caretaker exception may play a role. The child caretaker (or child caregiver) exception allows your elderly parent to transfer ownership of their home once they become Medicaid eligible to an adult child who provides care for them without violating the Medicaid prohibition on transferring assets during the "look-back" period.
This exception has benefits for elderly parents and their adult children. Adult children can provide care for their parent at home for as long as possible, while being compensated for this important and often challenging work. Adult children who move into a parent's home to provide care often can't afford to keep a separate residence, which means that if the parent is forced to sell the home to afford care, the adult child may be without recourse. Rather than having to sell the home to pay for nursing home care, with the child caretaker exception, the parent gets to remain in the home longer, which they likely prefer.
This is obviously good news for families, but parents and adult children must meet certain criteria in order to qualify for the child caretaker exception. The adult child must live with the parent in the parent's home for two years or more before the parent is admitted to a nursing home.
There are other limitations on this exception that prevent its abuse, but which also limit its usefulness. For instance, "child" is defined as just that: a biological or adopted child. A grandchild caring for a grandparent, or a niece or nephew caring for a childless aunt, are not eligible for this exemption, even if they otherwise meet the criteria.
Another restriction involves the issue of "care." It's not enough that you live with mom, cook her dinner, and pick up her prescriptions at the pharmacy on your way home from work. The level of care provided must be such that it makes the difference between your parent being able to remain at home and having to go to a nursing home or care facility, and you must be able to document this by having the primary care physician complete and sign a Medicaid form clearly documenting the care provided.
Last but not least is the definition of "home." The home referred to in the law must be your parent's primary residence, in which he or she lives with you in the same building. You can't live with mom at her two-bedroom bungalow in Dayton and have her deed you her vacation cottage at the lake under this exception.
Protecting an Ohio Residence with the Child Caretaker Exception
As you may have inferred, a fair amount of documentation is required to ensure that a transfer of a home by your parent qualifies for the child caretaker exception. It's unwise to simply trust that you'll be able to prove that the transfer should not be held against your parent when it comes to calculating eligibility for Medicaid.
Your best bet is to have an experienced Ohio elder law attorney advise you on what and how to document to prove that the transfer comes within the purview of this exception. The experienced elder law attorneys at Gudorf Law Group can guide you and your parent through the process of making the transfer and documenting both the length of your residence and the extent of your caregiving. Please contact Gudorf Law Group online or call 1-937-898-5583 today for a free consultation.