Dependent Child Revisited – Meaning of Dependency

Suppose a child is living in a potential applicant’s home because such child cannot live alone due to physical limitations. The child would clearly render the home an excludable resource as set forth in Program Instruction No. 85-8-9 (see Post 14).

If the parents were to go into a nursing home, the home would be protected under the aforementioned program instruction and the dependent relationship.

Since the child is also disabled, any assets transferred to such child would be free from transfer penalty (see Post 42).

The thought might occur that the transfer of funds to the child could hinder the dependent relationship and, therefore, render the house an includable resource. However, financial dependency is only one of the situations described in the program instruction. Other forms set forth as examples include medical, custodial or any other type of dependent relationship. Therefore, the broad definition of “dependent relationship” would allow immediate Medicaid as both the house and funds transferred are protected.

This post indicates the breadth and meaning of dependent relationship and points out that even financial independence would not ruin the excludable nature of the home.

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

© May 2009, Post 79