I recently found out about the adult child caregiver exemption for Medicaid. Where if an adult child cares for their parent for 2 years before the parent requires Medicaid that the parent can give the house to the child with no Medicaid penalty. Medicaid will not take the house. They do point out that you have to have adequate documentation proving you live in the house and are a caregiver. Proof of residency is easy but how does one prove they provided care? Does anyone have any experience with this?
No, they can't GIVE the house to the child. However, the child can continue to live there after the parent has moved to nursing care. Medicaid will put a lien on the house equal to the dollars spend on nursing care. Previously you mentioned that you have an elder care attorney. This is a great question for him/her.
jjariz above had mentioned seeing an Elder Law Attorney who is familiar with the complicated maze of going through Medicaid. I agree with that.
I was under the impression that if a grown child was a full-time around the clock caregiver for a parent, that the house would not be counted as an asset and wouldn't be subject to a lien. Thus the house would go to whomever Mom has in her Will, hopefully it would be the grown child doing all the work.
"The Caregiver Child Exemption, also known as the Caretaker Child Exception, enables an elderly individual to transfer their home to their adult child without violating Medicaid's 5-year look back rule on asset transfers. Therefore, they can transfer their home and continue to be or gain eligibility for Medicaid."
https://www.payingforseniorcare.com/medicaid/caregiver-child-exemption.html
"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."
https://www.daytonestateplanninglaw.com/medicaid-planning/2016/10/18/child-caretaker-exception-protect-house-medicaid/
Freqflyer, my understanding is that is not the case automatically. If you have not established a trust or a joint tenancy and waited out the mandatory lookback period before getting medicaid benefits, then medicaid will indeed put a lien on the estate including the house. That's the point of the child caregiver exception. To allow the adult child caregiver to keep the house without being bound by the lookback period. But it's an explicit transfer of ownership while the parent is still alive.
"(iv) a son or daughter of such individual (other than a child described in clause (ii)) who was residing in such individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility;"
ssa.gov/OP_Home/ssact/title19/1917.htm
Federal guidelines on exemptions, exclusions and cost benefit exists. However as each state administers it’s Medicaid programs uniquely, each state can determine just how all are done.
If your state requires that the exemption is an after death transfer that’s going to be a different situation than one that allows exemption to be done in tandem with the elders Medicaid application. If documentation is required, then it’s up to family to get & get whatever required adequate “as determined by the state”. Like for TX the exemption requires a letter from the Medicaid recipients MD or SW on letterhead with state licensing # that states with detail the full time care required. I imagine it will need to be such that it is truly a full time job. If you work full time at another job, it’s probably going to be quite difficult to show why you qualify for this exemption as it was not full time so your having a job & income ability wasn’t affected by caregiving. If elder has been in a NH for a year or 2 or even longer, well good luck on getting their old MD or SW to do a letter that can be used for a legally binding determination as it’s from chart history ages ago, plus they are no longer a patient and atop that their dead.
Exemptions and exclusions to Estate Recovery are there but it’s all about the details to make it work to the extent that the state allows for it. States position is not in the heirs interest. If your state is using an outside contractor for recovery, they -to me - are very much out of the debt collectors playbook. Personally unless you can get concurrent with medicaid application caregiver property transfer or your years verified low income only heir, I think your better off opening probate and recovery, if they file, then becomes a debt against the estate alongside whatever others filed.
Whatever the path, family / heirs must be able to afford all costs on the house as doing all this can take time.
Regardless. None of this is pressing. No one is on medicaid nor is anyone pending to be on it shortly. But things happen. I just want to prepared if/when it happens.