The Medicaid Child Caretaker Exemption
It is easy to idealize aging in place in a multigenerational household, but most adults who live with their parents do so out of economic necessity. The members of the household are sharing scarce resources. The house is often the only valuable asset that the older adults own. The younger adults still live paycheck to paycheck, despite saving money on housing costs by living with their parents, and their caregiving responsibilities for their elderly parents take up most of their time when they are not at work. It is as if they have a second job as a home health aide, except that, instead of getting a paycheck, they get to live in their parents’ house. This tenuous sense of stability can all fall apart if the parent’s health worsens to the point of requiring nursing home care. The worst-case scenario is that the entire family loses the house, and the decades they spent trying to build generational wealth fall apart. If you cannot afford nursing home care without Medicaid nursing home benefits, but your children cannot afford housing without your family home, contact a Tampa estate planning lawyer.
Which Family Members Are Eligible for the Medicaid Child Caretaker Exemption?
Estate planning lawyers often encourage clients to transfer assets to their heirs while they are alive; in brochures and on law firm websites, you get the idea that this strategy is for wealthy people who own so much property that, if it all went to their estate, would have to pay hefty estate taxes, too. This strategy works for the 99 percent, too, for those of us whose only reasonable option for paying for nursing home care is Medicaid.
For most homeowners who want to enter nursing homes as Medicaid beneficiaries, the only option is to sell their house and then have the Medicaid benefits pay for the nursing home once the proceeds from the sale of the house run out, or else to keep the house so the rest of the family can live in it. If you choose that option, though, Medicaid can force your estate to sell your house after you die, so the shelter and stability that you are providing to your family are only temporary.
Under the Medicaid Child Caretaker Exemption, you can transfer your house to your son or daughter before you enter the nursing home, and Medicaid will never interfere with your child’s ownership of the house. This rule only applies if your child has been living with you for at least two years and providing similar care to what you would receive from a home health aide. Unfortunately, the exemption does not apply to other younger family members who live with you and provide care, such as your stepchildren, nieces, nephews, grandchildren, and the spouses of your children.
Contact David Toback About Estate Planning for Multigenerational Households
A Central Florida estate planning lawyer can help you qualify for Medicaid nursing home benefits without upending the plans of the family members who live with you. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
medicaidplanningassistance.org/child-caregiver-exemption/
