In many families, the situation is familiar:
As a starting point, get the whole family focused on the senior in need of care and his or her wishes.
When a senior begins to need help, it should signal everyone that the family needs to pull together and develop a comprehensive care plan for now and the future. The key element of the plan is determining who assumes the caregiver role and whether that person should be compensated.
Key questions should include:
However, it is a big mistake to have the elder to start giving money to a family member, even if the whole family agrees it is the right thing to do.
Without a proper caregiver agreement, the payments will be considered to be gifts, not compensation, and will factor into the financial analysis that Medicaid conducts, including the five-year look-back period, to determine eligibility.
In addition, the payments are considered income for the caregiver’s income tax purposes regardless of how the senior being cared for views them.
As more and more families face their elder parents’ changing needs, many families are drawing up a legal contract called a caregiver agreement, also sometimes referred to as a personal services agreement or personal care agreement.
In fact, unless there is a proper notarized care agreement with any caregiver — whether a family member, non-relative individual, or a company — any caregiver payments will likely incur some penalty with regard to Medicaid qualification.
That includes ensuring that the elder has in place all necessary documents such as a Last Will and Testament or other estate planning vehicle, a Durable Power of Attorney, and an Advance Medical Directive for Healthcare to ensure that all eventualities are addressed.
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
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