As parents progress through their senior years, children find that the role of caregiver changes so that the children are caring for the parents. Such care may range from assisting with paying bills, running errands, and cooking meals to providing a home or caregiver services.
It is very important to remember that there is always the possibility that parents may reach a point where nursing home care is unavoidable. If parents do not have a long term health care policy or substantial assets to pay for nursing home care, the children will find themselves applying for Medicaid benefits to pay for the nursing home care.
Upon application, Medicaid will immediately begin looking at every single transaction made by or on behalf of parents. It is at this point that the children may realize they have made terrible, costly mistakes in their method of taking care of their parents over the years.
When buying groceries for parents, do not buy the groceries yourself and have your parents reimburse you unless you intend to keep the receipt. A check made out to you from your parents is a gift to you — an illegal gift in Medicaid’s eyes — unless you have proof that it was for a legitimate expenditure.
Parents have the right to do whatever they wish with their money. However, if they are going to apply to Medicaid for government benefits, they must comply with its rules. That means, no gifts (called transfers) for five years before applying for benefits.
Is Medicaid really this picky? Absolutely.
So, a child that is being a good child by buying groceries and/or medicine for the parents can get them in a lot of trouble with Medicaid if their checkbook is filled with checks made out to the child and there are no receipts to prove that the check was a reimbursement. Parents can also get in trouble for using cash. Medicaid wants to see every single dollar spent. Using cash is not a way to get around this requirement because Medicaid will want to see the receipts for the cash spent.
These are only a few tips to be aware of when caring for parents. This is not a comprehensive guide or legal advice for all situations. Medicaid has numerous rules and regulations. When a child begins caring for parents, it is a good idea for the child and the parents to consult with an elder law attorney for advice on what to do and what not to do. A little advice on the front-end can save a lot of money, heartache, and stress further down the road.
Editor’s Note: Melanie B. Bradford is an attorney located in Scottsboro, Alabama at 803 Garland Ferry Road at the intersection of Veterans Drive and Garland Ferry near The Daily Sentinel. Her phone number is 256-259-3301. The Alabama State Bar requires any communication that may be interpreted as an ad to state: “No representation is made about the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”