Tag Archives: MaineCare for the elderly

Should I give my house to my children?

           A question I often hear from clients is:  “Should I give my house (or camp) to my children?”  Clients often believe that deeding property to others will preserve it in the event of nursing home expenses. Clients may also want to avoid probate, or may want children to help with taxes, insurance and maintenance. It is essential for any client considering this move to know the risks and benefits.

 Possible benefits:

  • If the client is able to go five years without needing nursing home care, but later does need such care, the property will not count against the client if the client seeks financial help from the MaineCare (Maine Medicaid) program.
  • If the property is out of the client’s name at death, the State and other creditors will not have a claim against the property.
  • As a condition of transferring the property (especially a camp), children may agree to pay all or part of the property-related expenses, making life a bit easier for a client on a fixed income.
  • The client may, if desired, maintain a degree of control over the property with a life lease or life estate.*

 Possible risks (and some ways to reduce risks):

  • Nursing home expenses:  If the client needs nursing home care within five years after deeding the property, and if the client needs to apply for MaineCare (Maine Medicaid), the client will be penalized for the gift and will be ineligible for MaineCare for a period of months or years.  The client will either have to go without the needed care for that time period or will have to ask the children to pay for care until the period of ineligiblilty is over.
  • Loss of control:  Having given the property away, the client will need to get approval from the children if the client wants to sell or refinance the property.  (The client can, however, maintain the right to live in or use the property by insisting on a life lease or life estate.*) 
  • Child’s creditors or divorce:  If the child gets into financial trouble or bankruptcy or gets divorced, the child’s creditors or ex-spouse may be able to obtain an interest in the property. (However, the transfer of the property to an irrevocable trust may offer some protection against a child’s creditors or ex-spouse.)  
  • Child’s unexpected death:  If a child unexpectedly dies before the parent, the property may go to the child’s own heirs. (The irrevocable trust or a joint ownership arrangement may be helpful in this circumstance as well.)
  • Tax consequences:  If the client transfers a residence to a child and the property is later sold, there will be a capital gains tax, as the client will no longer be able to use the IRS primary residence exclusion.  The client may also lose property tax exemptions, such as the homestead and veteran’s exemptions.  In addition, the child may later, upon selling the property, pay a higher capital gains tax than if the child inherited it (unless a life estate* or similar arrangement is used).  

 Caution concerning life estates:  Be aware, however, that if you reserve a life estate in the property (treated differently  from a life lease under the State’s MaineCare rules), this  may expose the property at your death to a MaineCare “estate recovery” claim.

  Questions for clients:

          Before advising a client about whether to transfer property, I ask the client a number of questions, including: 

  • How is your health? What are the chances that you might need long term care in the next five years?
  • Do you have long term care insurance?
  • Do you have enough money to pay for nursing home care for all or most of the next five years?
  • Are you willing to give up a degree of control to your children? 

          In short, there is no simple answer to the question “Should I give my property to my children?”  While this may be a reasonable step for some clients, for others (especially older people with chronic health problems and little savings) the risks may be too great.  Any client considering this move should first obtain legal advice from a skilled estate planning or elder law attorney.


The information provided here is for educational purposes only, and should not be construed as legal advice or an answer to your specific legal problem.

Sally M. Wagley practices elder law, estate planning and estate administration with the firm of Levey and Wagley, P.A. in Winthrop, Maine, www.leveyandwagley.com.    


Legal Help for Family Caregivers

The important role of family caregivers.  More than 50 million people in the U.S. provide care for a chronically ill, disabled or aged family member each year. Some “tend out” to a relative; others give up their homes to move to a relative’s home; and others bring a relative into a guest room or in-law apartment. Consider the following survey data from 2000:

  • Family caregivers provided the overwhelming majority of long term care in the U.S.:  about 80%.
  • Over three-quarters of adults in the community in need of long term care relied exclusively on family and friends for care; only 8% use paid help only.
  • 17% of family caregivers provided 40 hours of care a week or more.
  • The estimated value of “free” services provided by these caregivers was $306 billion a year ($1.8 billion in Maine) — almost twice the amount spent on paid home care and nursing home care combined.
  • 1.4 million children under age 18 provided care to an adult relative.
  • 30% of caregivers are over age 65, many with their own health problems.
  • More than half of family caregivers work worked outside the home while caring for a family member.
  • The typical working family caregiver lost $109 per day in wages and health benefits as the result of care giving responsibilities.

(Source:   National Family Caregivers Association, www.nfcacares.org.)

Typical family caregivers. Some typical family caregivers I have seen in my practice:

  • Alice, a single teacher in her 50’s, whose father has dementia, takes early retirement with a reduced pension to live with and care for him full time.
  • Bertha and Gladys, maiden ladies in their 70’s, live together in the family home. Bertha cares for Gladys, who has Parkinson’s and receives MaineCare.  Bertha worries she will lose the home when Gladys dies.
  • John, a single father, leaves work frequently to drive his mother to doctor’s appointments, and worries about losing his job.  He’d like to hire a neighbor to help out, but can’t make sense of the payroll requirements.
  • Frances, married to Albert for 40 years, cares for him at home with the help of her two children.  Albert will soon need nursing home care, and Frances worries that the cost will take all their savings.

Answers and solutions for family caregivers. Caregivers face additional stress when encountering legal and financial issues.  There are some answers and some solutions for them, such as:

  • In the case of a married couple, when one is in a nursing home or assisted living, the spouse at home need not spend down all savings to pay for care, nor must she give up the home.
  • With proper advice, a married couple with one enrolled in MaineCare have opportunities to protect their estate for their heirs.
  • Hiring paid caregivers can be made easier with the help of an accountant or payroll service to handle tax withholding and other requirements.
  • Investment in income-producing property can be a wise move for some people, helping with MaineCare eligibility and helping to minimize the impact on their finances.
  • Under certain circumstances, an older person who wants to give his home to a live-in caregiver child or to a disabled child may, with proper legal advice, do so without risking MaineCare eligibility.
  • Older siblings who own and live in a home together can ensure that the survivor is able to keep the home upon the death of the first of them.
  • Maine’s “Long Term Care Partnership Program,” now in the development stage, provides incentives to people who purchase long term care insurance by enabling them to preserve assets for their heirs if they later receive Maine Care.
  • With a personal care contract properly drafted by an attorney, an older person may pay a relative or friend to provide care, without risking MaineCare eligibility.
  • A caregiver who takes time off of work to help an ill relative may be protected under the state and federal Family Leave Act.
  • A caregiver and older person who want to collaborate financially to build an in-law apartment should obtain advice to minimize tax consequences and ensure MaineCare eligibility later on.
  • Middle income elderly and disabled people seeking care at home may meet MaineCare income guidelines and should not hesitate to apply for help to supplement the help of a family member.

Caregivers in these situations should obtain professional advice.   “Self-help” is usually not a good idea.

Helpful links for family caregivers:

Spectrum Generations’ Family Caregiver Support program.  Download their publication, “Connections: A Guide for Family Caregivers in Maine”:  http://www.seniorspectrum.com/Services/Family_Caregiving.asp

Services available through Maine’s five area agencies on aging under the National Family Caregiver Support Program:  http://www.maine.gov/dhhs/oes/fcsp.htm

Information on respite/alternative care and caregivers’ support groups:  http://www.maine.gov/dhhs/oes/caregivers.htm