We encounter many families in our practice where one of the children and his or her spouse have decided that it would be in Mom or Dad’s best interests to come live with them. Usually, this is motivated by love, just plain old caring. Sometimes this is also motivated by financial pressure, such as a need for additional income to the household.
In a very few cases this is motivated by friendship, the parent moving in is genuinely the child’s best and oldest friend. Unfortunately, in all of these situations the law has laid a trap for the unwary and created a possible mechanism for denial of nursing home benefits when the day comes that care of the parent exceeds the physical, mental, or financial abilities of the child.
Undocumented transfers of cash to and from a parent can give rise to an assertion by HHS that the money transfers were gifts which then creates a penalty for obtaining Nursing Home benefits. These are evidentiary presumptions that HHS is required to adopt unless the facts proven by the applicant show otherwise. Having good documentation of shared expenses and contributions from all sources to the household can be critical to turning the attribution of a negative into the proof of a caring, cooperative living arrangement.
Of course, the best solution to this problem is to consult an Elder Law Attorney about the use of a Home Sharing Agreement before this arrangement is entered into. Similar to a contract for Room and Board, a home sharing agreement can negate the attribution of gift status when parents and children live together. It is always important to remember that unlike other government administered benefit programs, Medicaid for the Disabled and Elderly covering Nursing Home care is not a program where workers are focused on helping people get eligibility. Rather, it is a program where people are focused on protecting the public purse. Care and proper planning are central in this area.