If you are in good health and are helping your children or another family member pay for their bills with your money, then fall ill, and apply for Medicaid all within a five year period, you may be viewed as having transferred assets to qualify for Medicaid. If this happens the state will almost certainly impose a penalty period during which you will not be able to receive Medicaid benefits. The length of the penalty period is on the amount you “gave” away.
If you do not need Medicaid currently and transfer assets, you may want to look at setting up a room and board agreement which establishes the “payment” was for room and board. Another possible contract is a caregiver agreement. The caregiver agreement protects you from a sibling or other family member from creating conflict and allows you to have a secure financial plan. The contract clarifies what services are provided in exchange for compensation and lets the state know where your money is going and what it is paying for. However, compensation must be reasonable. These contracts can allow you to help family, yourself and give yourself a better chance to qualify for Medicaid.
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