You are allowed to charge someone living with you with room and board that is reasonable for the level of support provided. You should memorialize the room and board charge through a written contract. Otherwise, should your mother-in-law later need Medicaid to pay for nursing home costs, the payments for room and board will not interfere with her ability to qualify for Medicaid benefits. The written agreement should specify the nature of the goods and services being provided for her, and specify the costs. The costs need to be reasonable, otherwise the transfers of money from her to you or your husband might be considered "uncompensated transfers" for which there would be penalty period upon her otherwise qualifying for Medicaid benefits.
You can learn more about the issues associated with qualifying for Medicaid benefits and preserving family assets from nursing home costs at our website: www.thecolemanlwfirm.net/Medicaid_Planning_Attorneys.php
Randy Coleman
Answered on Apr 06th, 2012 at 4:03 PM