Q & A Series: ” What is the Caregiver Child Exception? “

Q&A Series is a collection of frequently asked questions that we often hear from clients.  It provides brief answers to many common questions about estate planning, Medicaid planning, special needs planning and other elder law issues.  Interested in learning more?  Search “Q&A”. 

What is the ‘caregiver child exception’? 

Generally, a transfer of an asset without compensation within five-years of an application for Medicaid will cause a penalty period to be assessed.  What is a “penalty period”?  A penalty period is a period of time during which Medicaid will not pay for nursing home care because the Medicaid applicant gave something away.  The length of the penalty period varies by the value of the gift. Under Medicaid (MassHealth in Massachusetts), there is an exception to the typical five-year penalty period for gifts of real estate when a parent transfers her home to a so-called “caretaker child”. Under 130 CMR 520.019(D)(6)(d), a transfer of a former principal residence by a nursing home resident to her child for less than fair market value during the look-back period is permissible provided that the nursing-facility resident’s child 1) was living in the nursing-facility resident’s home for at least two years immediately before the date of mom’s admission to the facility and 2) who, as determined by the MassHealth agency, provided care to the nursing-facility resident that permitted mom to live at home rather than a nursing home. In order to qualify for the exception, the MassHealth agency will need as much documentation as possible to support mom’s claim that her daughter has resided with her and has been providing care at home.   Thus, delaying mom’s entry into the nursing home.  This documentation must be done properly so as to qualify for the exception.  You should see a qualified elder law attorney to learn what steps need to be taken to qualify for the exception. 

The information contained in these blogs is not intended to make you an expert on estate planning nor are these blogs intended to replace the need for the advice of a professional. Rather, these blogs are simply intended to provide a basic understanding of why estate planning is important for everybody and a basic understanding of some of the more common estate planning tools.©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street,   Hyannis MA 02601 and 1265 Belmont Street, Suite 2, Brockton, MA 02301.  This article is for illustration purposes only.  This handout does not constitute legal advice.  There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article.  Do Not make decisions based upon information in this handout.  Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney.  Any decisions made without proper legal advice may cause significant legal and financial problems.