| The natural thing to do when something goes wrong in your parent’s house is to fix-it. That may be the worse thing to do if you want to maintain separate households for tax and medicaid-eligibility purposes.  It is a sad fact of today’s world that most families can’t afford the financial impact of long term illness. With the elderly living longer and medical expenses increasing at rates far in excess of inflation, without federally-sponsored help, medical bills can bankrupt most family units. A recent government report indicated that healthcare had increased 35% since 1997 while overall inflation had only gone up 2.3%.
At the same time, the cost of long term care insurance, currently held by only 2% of the eligible population, is also beyond the reach of most of elderly population. Caregivers often rush to do things because they should be done. Sometimes, this can be disastrous in the long run. | Suggestion | | The best course of action is to put the parent’s home in the name of the primary caregiver. Although fraught with danger from fraud and extreme emotional impact, this is the best way of helping them should long term illness occur. Under federal programs, the assets of the parents must be used up before support from governmental sources begins. Only in the case of a husband-and-wife situation is this somewhat ameliorated in terms of home ownership. However, once one partner dies, the harsher provisions come into play. One of the most important considerations in this action are the feelings of the parents or relative who is signing over perhaps their only asset and their home. Also, the caregiver is taking on an enormous responsibility by accepting the home and with it the explicit commitment to take care of the parent. When siblings are involved, this also creates tensions in terms of inheritance and responsibilities. |
For purposes of establishing medicaid eligibility, it is important to separate and keep a caregiver’s household income and expenses from the parent’s assets. This is particularly true if they own their homes. If something does go wrong at your parent’s home, it is important that you have it fixed. It is equally important that, whenever possible, the cost of that repair is provided through an account in which they have some interest. Demonstrating their independence will help you help them in the future. Where possible, a caregiver should pay for the repair with the parent’s checking account or with a money order. This will enable you to demonstrate to any state or federal agency that you are not responsible for their household. If repairs are done by a caregiver or other member of the family, careful records should be kept of what was done, the cost of materials, time spent and an estimate of in-kind value provided in some written documented form.
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