If a parent eventually receives Medicaid the funds expended for their care will eventually be recovered by the state if possible. This means any unsecured asset left by the parent will be used to repay the Department of Health and Human Services before anyone else, including a family member.
Despite a familial understanding that the loan would eventually be repaid, for example through the sale of a family home once aging parents enter long-term care, without some type of agreement, a child is treated just like any other unsecured creditor when compared to the government.
The simplest way would be a document like a reverse mortgage tying the debt to the parents’ home. A child must be able to track the money moving from their account into their parents’ and to recover any loan the amount and terms must be documented.
In a perfect world, everyone would be able to pay for their parents’ care without any expectation or need to be repaid. But for people not in a situation where that is feasible, it is important to understand the implications of their actions.
Mr. Abraham is an experienced attorney and founding member of the Law Office of Richard K. Abraham. The Sparks, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
Schedule a consultation to help you and your loved ones.