Medicaid.  When a loved-one has to leave their home for a nursing home and Medicaid benefits are needed, there is always a fear that the State will “take” the house.  This is especially true when a child has previously moved into a parent’s home to act as the parent’s caregiver.  Once the parent moves into a facility, what will become of the child caregiver?

Medicaid Does Not Take The House

The House is usually a family’s largest asset

First, neither New Jersey, nor Medicaid “take” real estate.  In many instances, the home is held by the other spouse, or another person. In some instances, Medicaid may require that the house be sold, but this is not confiscation.  In the case of a caregiving child, Medicaid provides an exemption which may allow the parent to transfer title to the child.

The Caregiving Child Medicaid Exemption

Under Medicaid regulations, an individual may transfer his or her home, to a “child, who has resided in the home of the parent for at least two years immediately before the date the individual becomes institutionalized and who provided care that permitted the individual to reside in the home, rather than an institution”. In other words, if it can be shown (1) that the child resided in the parent’s home for at least two years before entering a nursing home; and (2) that the child rendered care to that parent, and, absent that care, the parent would have been institutionalized earlier, then (3) the parent may deed the house to the caregiving child without penalty.

New Jersey Medicaid’s Interpretation Of “Care”

Sometimes the child caregiver has an outside job.  Sometimes, the child caregiver may hire an aide, so that they can take care of their personal business or even to get some time off.  Unfortunately, New Jersey has interpreted the word “care” to mean full-time, sole care.  If the child has an outside job, New Jersey holds that this is not the care intended under the regulation and will not permit the house transfer.  If the child hires an aide, there too, New Jersey holds that this is not the level of care needed for the house to be transferred to the child.  Other states are more lenient, others not.  The leading elder law attorney’s organization, the National Academy of Elder Law Attorneys, of which I am a member, is challenging this interpretation, but the law stands for now.

Medicaid Exemptions Are Difficult

There are numerous exemptions under the Medicaid regulations which are available to help people.  However, you must be sure that you meet not only the requirements, but the interpretation that your jurisdiction applies.  You need an experienced elder law attorney to guide you through the process.  Law Offices of Robert J. Shanahan, Jr. can advise you of all of the possible exemptions, and how to proceed so that you may receive the benefits Congress created.  Give us a call. We can help.