Question: My mother deeded her house to my sister and me more than seven years ago, meaning that the transfer is beyond Medicaid’s 5-year look-back period and should not affect my mother’s eligibility for Medicaid benefits. My family moved into her home (which is now owned by my sister and me) approximately 4 years ago to help her with her care needs and try to keep her in the home as long as possible (she has dementia). My question is this: the home has needed repairs over the years, and we have always used my mother’s money for the repairs. Will her payments for home repairs be considered gifts since we own the home and are living in it with her?

Answer: Yes, you can expect your mother’s payments for repairs to your house to be treated as gifts. You might argue that she made these payments in lieu of paying for her room and board. A written agreement in that regard would have been helpful (don’t write one up after the fact now since that would look self-serving), but you could make the argument in any case. Of course, this is assuming that these were minor repairs, not replacing a kitchen or adding a room or a pool out back, in which case there is no avoiding gift penalties for the payments

For more information about Medicaid’s asset transfer rules and Medicaid planning, click here:

(This blog post is adapted from an article on the ElderLawAnswers website. Mr. Vanarelli is a founding member of ElderLawAnswers.)

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