The years flash by and one day the family starts talking with their aged parents about moving the parent(s) to live with a child. It’s a good idea to talk about this with an elder law attorney because we can identify many issues to be considered. Here are a few of those issues, with general suggestions. Each person’s situation is unique of course, and this article isn’t intended to provide legal advice for any specific situation.
Always keep in mind that if substantial hands-on care is ever needed, you might decide to apply for Medicaid. The application for Medicaid involves a 5-year look-back of all your transactions. If gifts were made during this 5-year period, benefits will be denied for some period of time. And Medicaid benefits are frequently denied where there were informal shared living arrangements in which cash moved erratically between parent and child, because the program rules assume that the parent was making ongoing gifts to the child. A recent case illustrates how this plays out. This was an appeal and the decision is “not precedential,” meaning it is limited to its facts. H.L. vs Monmouth BSS penalty for rent pymts, unpubd A2052-21
Here are some general tips when parents move in with a child:
- Create an ongoing record of all financial transactions and keep cash transactions to a minimum.
- If you’ll be making payments to your child for room and board, choose some reasonable standard monthly amount and create a signed and dated written occupancy agreement.
- Pay for the parent’s expenses using the parent’s credit card, checks/ACH transactions, or debit card, rather than the child’s cards/account.
- Avoid making cash/check “reimbursements” to a child for money they spent on the parent – Medicaid treats them as gifts if you can’t prove otherwise.
- Parent shouldn’t pay for capital renovations to child’s house without considering the impact on potential Medicaid eligibility.
Careful planning can prevent a crisis. Call us for advice and assistance regarding shared living arrangements ………….. 732-382-6070