Issue 5, August, 2007
FEATURE ARTICLE - Family Care Agreements, A Golden Opportunity
HEALTHLINE - Preventing Falls In The Elderly
LEGALLINE - Veterans Benefits - What You Might Not Know (Part 2)
CAREGIVER HELPLINE - Caring For Someone With Dementia (Part 3)

Family Care Agreements, A Golden Opportunity

All too often, families put off coming to our office until their beloved elder relative or friend has already been admitted to a nursing home or is on the verge of being admitted. So often in these cases, we hear the story about how family members or friends have been caring for the elder, for months or even years, without compensation. Often the caregiver has quit a job at considerable financial hardship. Now the elder will be admitted to a nursing home and his or her savings will have to be spent down and virtually depleted, mostly on nursing home care, before the government's Medicaid program will help to pay for the elder's care.

These families have missed out on a golden opportunity. Had they planned in advance, the elder could have compensated their caregivers with the savings that will now go to the nursing home. Compensating a caregiver for services rendered in the past is not possible.

Gifting of assets has become more complicated for a person entering a nursing home and can cause them to be denied Medicaid. What we call a gift, Medicaid calls "a transfer for less than fair consideration", in other words, the elder did not get something of comparable value in return. Paying a caregiver is not a transfer for less than fair consideration; it is, instead compensation for services rendered. An elder is allowed to pay someone (even a friend or relative) to provide them with needed services; that is permitted by Medicaid law provided it is done properly. The first step in doing it properly is to have a written agreement at the outset of the arrangement. Unless there is a written contract when the services are rendered, the law presumes that the care was provided out of love and affection with no expectation of compensation; an after-the-fact payment will be considered a gift no matter how hard the caregiver worked.

Services do not have to be skilled or medical in nature to be compensated. the types of services for which the elder can pay compensation include, by way of example, housekeeping; laundry, food shopping, meal preparation, help paying bills and finances, help with taking medicine, being driven to the doctor or to church, assistance with bathing or other grooming tasks. The list goes on and on.

Here are the steps to follow in setting up a caregiver agreement:

• There must be a written, legally binding and properly drafted and executed contract; an oral arrangement will not work;
• The elder must be evaluated to determine and document their care needs;
• The amount of caregiver's compensation must be comparable to what is being charged in the marketplace.

Our attorneys, Henry and Maria, in collaboration with our Elder Care Coordinator, Ruth Valentine, a social worker with over 37 years experience in healthcare, can draft an appropriate caregiver agreement that would satisfy these requirements.

Think of the advantages to be gained from a caregiver agreement: stress will be reduced because expectations of the elder and the caregiver will be defined in advance and because the caregiver will have a source of income; and the elder's dignity will be preserved in knowing that they are not imposing on the caregiver! It is a win-win, but only if you PLAN EARLY.

Copyright © 2004-2008 Levandowski & Darpino, LLC. All rights reserved.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Copyright © 2008 by Levandowski & Darpino, LLC. All rights reserved. You may reproduce materials available at this time for your own personal use and for non-commercial distribution. All copies must include this copyright statement.