A New York court recently held similar to the New Jersey rule that an agreement needs to be in place between a parent and caregiver child to provide care. Medicaid is the federal government program that will pay for long-term care. This program has a five-year lookback meaning they will look into the applicant’s financial history to see what funds were transferred for less than fair market value. When a parent pays a caregiver child for care without a written agreement they put the elderly parent at risk of a Medicaid penalty should they require payment assistance later on.

In the New York case, the mother reimbursed the daughter for caring for her in the home for as long as possible. When mom required skilled nursing care at over $10,000 dollars a month, the daughter needed the government to assist with the payment. The problem: mom had numerous transactions within the lookback period which ultimately resulted in a sizable penalty.

Facilities can reject the resident which would ultimately require the child to take mom in until the Medicaid penalty is served. In this case, the penalty would last at least one year. This can be traumatic on the family.

To avoid this type of mistake, you should begin planning for yourself or your loved one early on. At Rothamel Bratton, we can help you plan to save those hard-earned dollars for your children’s benefit. Contact an experienced elder law attorney today for more information at 856-857-6000.