Millions of Americans are currently caring for an elderly family member or friend, without receiving compensation.
Depending on the circumstances, however, it may actually be beneficial for both parties to enter into a care contract wherein the caregiver accepts payment for the care they are providing their loved one and also formally assumes responsibility for that care.
For loved ones still at home:
If the loved one you are caring for reaches a point where nursing home placement is the only option, all of their money will be considered available to pay for their care at the nursing home and they will not eligible for Medicaid assistance until all of their assets have been depleted. Certainly the care they were provided by you, while they remained in the community, is just as valuable to them and worthy of payment as that they will be provided in the nursing home. With a care contract in place, they can pay their caregiver, and every penny spent will count towards their “Medicaid spend down” should they apply for benefits.
It is important to note that without a proper contract in place, Medicaid will assume the money paid is a “gift” or a “transfer of assets” and will impose penalties resulting in ineligibility for Medicaid benefits.
While the personal care contracts may not be appropriate in everyone’s situation, if you are caring for your loved one at home or in a nursing home, it is something that you may want to discuss with a knowledgeable professional who can advise on possible tax consequences and/or Medicaid and estate planning issues.
At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.
We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com