When can a home be deeded to a child?
When we speak to groups, we get this question a lot: I took care of Mom, so she can give me her house now that she needs a nursing home, right?
Maybe. Let me explain.
Medicaid is the system that will pay for a person’s nursing home if she does not have the funds to pay for herself. A person cannot give her assets away and then get Medicaid soon. Instead, Medicaid has what is called a look-back period. If you give away assets within 5 years of applying for Medicaid, Medicaid will deny your application for a period of time: For every $196 given away in the 5 years before applying for Medicaid, Medicaid will not pay for the nursing home for 1 day. This amounts to Medicaid not paying for the nursing home for 1 month for every approximately $6,000 gifted. What’s even harsher is that the penalty period does not start to run until the person is otherwise eligible for Medicaid. For a single individual, that is when she has less than $2,000 in countable assets.
There are some exceptions to the look-back rules, including the caregiver child exception. If a child has served as a caregiver for the parent who is now in a nursing home, the parent may be able to deed her home to the child with no penalty.
To qualify, the caregiver child had to live in the parent’s home for at least 2 years immediately before the parent went into the nursing home. During that 2 years, the child had to provide care to the parent such that, had he not provided care, the parent would have needed a nursing home at least 2 years sooner. Sufficient proof must be submitted to Medicaid.
Kentucky ElderLaw can assess whether this rule applies to your family’s situation. Contact us for a free consultation.