Caregiver Exception: Saving The Family Home From Nursing Home Spending
SPECIAL CAREGIVER EXCEPTIONTO SAVE THE HOME
FROM NURSING CARE SPEND DOWN
Many people are becoming increasingly concerned about the possibility that they, a parent or loved one may lose the value of their primary residence in order to finance the cost of long term nursing care. In this article we will describe one way that the primary residence could be protected from nursing care spending. Although this is one method for protecting the primary residence, there may be other ways to protect some or all of the value of the real estate using other techniques.
There is a federal statutory provision which is recognized in Pennsylvania that allows for a parent to transfer his or her primary residence to an adult child without any penalty under the Medicaid Asset Spend Down Rules. Typically, an individual will be penalized with a Medicaid ineligibility period should they make gifts withing 5 years prior to applying for Medicaid.
Legal Exception: Even though a gift of the primary residence would typically mean that the person making the gift would become ineligible for Medicaid for up to Five years, there is one prominent exception to that rule. The federal statute provides that a parent may transfer their primary residence to a child without causing an ineligibility period if the following is true: 1) That child resided in the property for at least two years prior to the parent entering a nursing care facility. 2) The child provided care for that parent that kept the parent out of the nursing home for at least the two years prior to entering the nursing home.
Legal Documentation: It is very important that proper documentation be made if this asset protection technique is used. The child to whom the gift will ultimately be made, should keep a log or journal that sets forth specific instances or events that but for the child’s care might have resulted in the parent’s institutionalization. These notations should include aspects of a parent’s behavior that would have necessitated full time nursing care. These might include gas or electric burners not being shut off, water left running in the tub or sink, or the parent wandering outside without being properly clothed and in a way that may be dangerous or medically harmful to him or her.
The child should also obtain statements from other family members or neighbors telling of any events or circumstances that reinforce that child’s position. They should also have documentation from a physician or visiting nurse that would set forth their belief that the parent was only able to remain in the home because of the child’s full time care and that the actions of the child kept the parent out of the nursing home for at lease two years. This record keeping will be a very important aspect of the planning process. As you can image, the Department of Public Welfare will be ambitious in scrutinizing this type of transfer. You must be ready to prove that the transfer was legitimate and fell within the requirements set forth in the statute.
This exception to the ineligibility rules that typically exist will not be available to everyone. However, it should give rise to the possibility of an adult child moving in with a parent in order to prevent them from needing long term care immediately. In turn that child will be rewarded by the ability to retain the parent’s primary residence. Please note that there are other basic exceptions where the primary residence could be protected under certain circumstances. They are briefly as follows: A transfer to a minor, blind or disabled child, or a sibling who has an equity interest in the home and who has resided there for at least one year before the Medicaid applicant became institutionalized and they have retained the property during his or her lifetime.
To discuss Elder law planning options and be secure that they are proceeding properly, it is important that you consult with one of your professional advisors, so that you can review your specific circumstances and determine the best course of action.