More and more Americans are choosing to provide in-home care for elderly family members.
This growing trend may arise from the desire to avoid the steep monthly costs of nursing home care or out of a desire to allow a loved one to age at home in familiar settings. Families generally reach this point when a senior needs more than just occasional assistance with daily activities like finances, driving, grooming, cooking or medication management.
However, many caregivers are often paying a personal price for these services because they are not always being paid for the care provided to the at-home seniors. In many cases, caregivers have moved in with the senior and given up employment to provide full time, at-home care to a senior without any compensation for these significant sacrifices.
Depending on the circumstances, however, it may be beneficial to both the caregiver and the senior to enter into a personal care agreement.
A personal care agreement is a formal contract between a senior who needs care at home and one or more individuals who can provide care. Under the legally binding contract, the senior can compensate caregivers for services rendered. These services could include cleaning, yard maintenance, shopping, cooking and grooming assistance.
The agreement clarifies exactly what tasks are expected in return for a specific monetary amount. It is recommended that close family members discuss the contract to resolve concerns and any potential for confusion about the payments and the impact of the agreement on the senior’s estate plan.
Additionally, the senior’s payments under a properly drafted contract will not jeopardize his or her potential to qualify for Medicaid in the future. If a senior needs nursing home care and applies for Medicaid to assist with those costs, Medicaid will review the senior’s financial transactions for the five previous years to determine whether the senior has gifted any money in that same time period.
With a properly drafted personal care agreement in place, the payments for caregiver services will be permitted by Medicaid as a legitimate expense. However, without an agreement or contract, Medicaid could view any in-home services rendered by a caregiver as being provided gratuitously out of a duty of love or affection.
Even worse, without a contract, any payments could be seen as an attempt to hide assets by giving cash to family members. Medicaid may well penalize any payments for care services without an agreement in place.
What follows below are necessary components of a personal care contract:
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