Caregiver Exception: Saving The Family Home

Caregiver Exception: Saving The Family Home
By: Douglas L. Kaune

If you or a family member qualify for Medical Assistance (Medicaid), the Federal Government will pay for the long term nursing home expenses.  As many of you are aware, there are rules in place that limit  the gifting of assets in order to qualify for Medical Assistance.  Presently, there is a five year ineligibility period that results when large gifts are made by an individual or family member.  That five year ineligibility and look back period could be expanded should the federal government decide to change the rules and to make them more strict.

There is a powerful exception to the Medicaid gifting rules.   This is referred to the Family Caregiver Exception.  The Family Caregiver Exception requires that a child live with a parent for at least two years prior to the parent receiving long term nursing care.  Additionally, the child caregiver must provide care that is necessary to keep the parent at home.  The child must prove that absent the care provided by the child, the parent would have needed long term nursing care.

If all parameters are met, The Family Caregiver Exception allows for a parent to transfer his or her primary residence to a care giving child without Medicaid ineligibility.  Keep in mind that the PA Department of Public Welfare will require a hardship waiver application and will review the case in great detail.  You must be prepared to document the care provided to a parent and that it rises to a level beyond simply living with him or her.  Doctors and/or nursing professionals should be called upon to document the parent’s condition on a regular basis while the child resides with him and her.  The documentation should provide a detailed listing of the care provided by the child and that the parent would not be able to live at home without the child living with him or her.  It is very important that you received professional guidance when you are setting up the Family Caregiver process.  The insight into this documentation and structure can be invaluable.

Through proper planning, this exception to the Medicaid rules can be employed to save the family hundreds of thousands of dollars.  The family residence is likely to be worth between $100,000 and $500,000 and could not ordinarily be transferred without advanced planning.  This Family Caregiver Exception provides a unique opportunity to shelter a valuable family asset from nursing home spending.  Read my AVVO Guide to learn more about this opportunity to protect and transfer the family home to the next generation.

Read this article to learn more about another exception to the Medicaid Gifting Rules.

Read This Article to learn more about using Medicaid Asset Protection Trusts to save assets from nursing home spending.

Doug is a member of the National Academy of Elder Law Attorneys (NAELA) and a Partner with Unruh, Turner, Burke & Frees, P.C. which is a full service law firm with offices located in Malvern, Phoenixville and West Chester, PA and also serving Philadelphia and other towns in Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).