Caretaker child exception to the no gifting Medicaid rule?
The exception allows elderly parents to transfer their home into the name of an adult caregiver child without violating rules about asset transfers during the five-year “look-back” Medicaid penalty period.
Hi. My name is Steve Bennett, and I am going to briefly discuss the caretaker child exception in the context of long-term care. In a prior video, we reviewed the ramifications of making any gifts within five years of when a loved one enters a nursing home and applies for Medicaid. Essentially, Medicaid penalizes the applicant by refusing to pay the vast majority of the applicant’s nursing home bill for a number of months that corresponds to the value of the gift. One of the biggest exceptions to this penalty is a transfer of the applicant’s homestead to a caretaker child. If a child resides in the applicant’s homestead for a period of two years prior to the applicant entering into a nursing home and applying for Medicaid and the child provides care to the applicant which allowed the applicant to stay home (rather than entering into a nursing home), a transfer of that homestead to the caretaker child will not trigger a penalty. Using this exception properly provides a powerful planning technique that you may be able to implement to not only save a family home but also to do so without incurring a penalty. If your family or someone you know desires to protect their home from the costs of long-term care, you should discuss this planning technique with one of our elder law attorneys in our office.