A Caregiver Agreement Can Help With Medicaid Qualification
Believe it or not, the care a child or other loved one may already be providing to a disabled or elderly parent has a market value – and this can be used to protect assets as the family prepares to transfer to Medicaid in New York. This can be done using a Caregiver Agreement or Personal Services Contract.
If a parent gives an adult child (even one providing necessary care) a significant financial gift during the five-year “look-back” period for Medicaid, that gift will result in a penalty period. The child will have to either pay that money back, or the parent will have to find another source to pay for that care. However, if the parent and child instead use a properly drafted Caregiver Agreement, any money given to the child can be structured as compensation, not a gift. This ensures that money will not be subject to any penalties.
Necessary Elements Of A Caregiver Agreement
It is essential that a Caregiver Agreement be detailed and follow strict rules. Only an experienced New York elder law attorney should draft this agreement. There are many distinct details that should be addressed within this agreement. For example, even the compensation based on hourly and yearly calculations for 24-hour care should be addressed. Furthermore, family members who are not part of this agreement should also agree with the arrangement, as this can protect relationships down the line. Both the caregiver and the person receiving care should pay attention to the tax consequences of the arrangement, with the caregiver treating the compensation as ordinary income and the person receiving care possibly being able to deduct these expenses.
A Caregiver Agreement can also help parties receive more care than a nursing home or Medicaid would typically provide. The agreement can also help a parent who needs the care to supplement the income of an adult child without either party feeling that the child is receiving a handout. This type of agreement can preserve everyone’s dignity, and even preserve family harmony if other siblings cannot or do not wish to provide care for the parent.
This type of agreement can be used to help in a wide variety of situations, and if family members are willing and able to provide this type of care, it should be strongly considered. Working with an experienced elder law attorney can ensure that a Care Agreement can meet your family’s needs for an elderly or disabled loved one.
Your Caregivers Are Invaluable. Make Sure They Get What They Deserve.
Our Buffalo law firm will help you navigate the Medicaid application process. Before the initial consultation, we ask for a confidential survey of a client’s assets to better assist your needs. We can assist with the application process and help you understand what is required to qualify. To get started, contact Ingold Law PLLC in Williamsville, New York, by calling 716-972-3698.
**Our Medicaid practice is limited to those over 65 or disabled.**