Caretaker Child - Practical Aspects

Caretaker Child – Practical Aspects

Prior posts have addressed mainly the rules and theoretical basis for various aspects of Medicaid planning. The next several articles will deal with practical applications of some of the aforementioned rules.

Suppose Mrs. Smith has a home, is competent, but is also a nursing home candidate. Susan, her daughter, has her own home and is willing to have Mrs. Smith move in and make improvements and/or expansions to her home to accommodate her mother.

The various posts (see Posts 6, 23)) that have been discussed are particularly applicable in this situation.

The plan would be for the daughter to make the necessary improvements and/or expansions on her home, Mrs. Smith would sell her home and move into Susan’s home. Prior to moving in there would be a caretaker agreement that would provide for the services and living arrangements to be provided by Susan in exchange for reimbursement by Mrs. Smith which would be set forth in a caretaker agreement.

Such an approach would not only save the value of the house of the family by way of payment to Susan, but would allow the mother to reside with her family and have care rather than live in a nursing home.

As indicated in Post 17, it is absolutely necessary that there be a third party valuation which sets forth the amount of payments to be made by Mrs. Smith. Such payments must be at the prevailing rate in the community. Any payments by Mrs. Smith in excess of that would be treated as a transfer.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.


© June 2009, Post #40