New York Medicaid planning and the caretaker child exception

As most adult children with aging parents in New York can likely attest, caring for a beloved elderly relative may sometimes feel like the equivalent of a full-time job. Of course, it's a job most loving family members are more than happy to do, but it can be a bit onerous nonetheless: rearranging or even leaving actual paying jobs, or spending time and money to ensure aging parents receive the best care possible. Thankfully, with Medicaid planning and legal guidance, there are ways seniors can help give back to their adult children.

There is a transaction known as the caretaker child exemption that allows an elderly parent to transfer his or her home directly to a child, with a few stipulations. First, the child needs to have resided with the parent in that parent's home for at least the previous two years, and second, the child needs to have provided care that allowed the parent to remain in the home, rather than entering an assisted living facility or nursing home. With a lawyer's guidance, all this can be done legally to help a loving parent compensate his or her adult offspring for personal sacrifices made in exchange for parental care.

This property title transfer can have advantages for Medicaid planning, too, but there are many rules and stipulations that must be followed to avoid penalties or outright disqualification. For example, seniors who do end up requiring nursing home care later can qualify for Medicaid assistance to help cover the costs if they meet the means-based asset and income requirements, but any assets -- including their home -- that have been given as a gift within the last five years are subject to penalties. However, Medicaid rules stipulate that the caretaker child exemption is not subject to this penalty.

Unfortunately, as with most Medicaid planning issues, the caretaker child exception comes with a labyrinth of confusing rules to navigate. For example, only children qualify; other family members -- even foster children and grandchildren -- are not eligible. This is only one of many specifications to consider. Anyone in New York in need of legal advice and guidance on this or any other Medicaid planning issue would be well advised to seek the counsel of an experienced Long Island New York Medicaid planning attorney.

Source:, "The Caretaker Child: How Aging Parents Can Compensate Adult Children For Care At Home by Kara Gansmann", Kara Gansmann, Oct. 16, 2017

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