Caretaker Child Exception Can Protect Residence of Medicaid Recipient

I often receive calls from family members when a loved one is no longer able to be cared for at home and is in need of more care in a nursing facility.  The family is concerned about being unable to pay for the person’s stay in the nursing facility because the loved one still owns a residence and is afraid that the residence must be sold and the proceeds spent down to under $2,000 in order to qualify the loved one for Medicaid.  Medicaid is the federal program administered by the states that provide financial assistance to loved ones to pay for his or her nursing home expenses.  In order to qualify for Medicaid, the loved one cannot have more than $2,000 of assets.  There is an exception that would allow the residence to be transferred to the child who has been living with the loved one if certain requirements are met.  This is called the Caretaker Child Exception.

The Caretaker Child Exception has been in existence for a number of years.  However, the State of Ohio has recently revised the Caretaker Child Exception rules.  Specifically, the title to the residence can be transferred to an individual’s child who meets all of the following requirements:

1. The child has provided care to the loved one which has allowed the loved one to reside in his or her home rather than in a long-term care facility;
2. The child has resided in the home for at least two years immediately before, and on a continuous basis, since the loved one became an institutionalized individual; and
3. The following documents are submitted to the Department of Job and Family Services during the Medicaid intake meeting:

1. 1.  A written statement of the date that the child moved into the home;
   2.  A document called a “Level of Care Assessment” that shows the loved one would have become institutionalized earlier without the care provided by the child.  This document is usually completed by the loved one’s physician;
   3. A written statement from the loved one’s physician stating the kind and duration of care that was required to delay the loved one’s institutionalization;
   4. Relevant documentation of the care that delayed the institutionalization and the role the child played in that care.  This documentation may include one or more of the following:

1. 1. 1. A statement of the number of hours per day during which the child provided care, specifying the extent and type of care;
      2.  A written statement of any part-time or full-time jobs performed by the child in any schools or other similar institutions attended by the child while providing care; and
      3. Documentation from a service agency that provided care to the loved one, the dates on which care was provided, and the extent and type of care provided

e. Assuming all of these matters are submitted at the time of the Medicaid intake meeting, a decision can be made by the Department of Job and Family Services to allow the residence to be transferred to the caretaker child without this transfer being considered a gift. Therefore, there would be no penalty period for the transfer. This would then allow the loved one to qualify for Medicaid, assuming the other health, income, and asset requirements are met. 

If your situation involves a loved one who has resided with a child, the child has performed services for the loved one for at least two years prior to the loved one going to the nursing facility, and this care has delayed the loved one going to the facility, then the child may qualify as a caretaker child.

Please contact your local estate planning and elder law attorney to discuss this planning option in further detail if you have this family situation.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.