Another Means Of Asset Protection

Can I preserve my assets by paying a family member for my care?

Medicaid clearly allows care contract payments for caring for loved ones living at home. The question is will it allow personal care contracts for providing care services for those residing in nursing homes? States differ in their laws, and while Georgia is a bit unclear, there is no downside to having your elder law attorney prepare one for you, if you are a significant care giver for a family member. If money exists to pay for the care and it isn't spent on you, then Medicaid will force your aged loved one to deplete his or her assets before it will declare them Medicaid eligible. Even if Medicaid challenges you in court and you spend some of your aged loved one's money on litigation costs, nothing is lost, even if you lose. Medicaid would force your loved one to pay the money you spend on an attorney's defense in court on health care before he or she would be Medicaid eligible anyway, and you will probably win in court and save thousands.

When should a personal care contract be written?

You should have it prepared as soon ahead of time as possible. Without a proper contract in place ahead of time, Medicaid will consider the money paid to you to be a gift or a transfer of assets without value. This means that every dollar paid for services without a properly prepared contract will be added together to determine the Medicaid penalty. Ignorance can be costly.

What should be in a personal care contract?

As to what should be in the contract, look at a winning case in Missouri, the Reed case. One month after Mrs. Reed entered a nursing home, she and her daughter Sandra entered into a lifetime personal care contract wherein Sandra agreed to perform a number of services for her mother, including preparing meals, cleaning, laundry, assistance with grooming, bathing, personal shopping, monitoring her mother's physical and mental conditional and nutritional needs in cooperation with health care providers, arranging for transportation, visiting weekly and encouraging social interaction, and interacting with and assisting in interacting with health care professionals for her mother during her lifetime.

Even though Mrs. Reed was receiving the care of a nursing home, the court ruled that the $11,000 payment was fair compensation and that the services provided by Sandra under the contract were not duplicative in that Sandra provided a communication link between Reed (who suffered from Parkinson's, had a stroke and had difficulty communicating with staff and facility personnel). The court noted that the services "enhanced Reed's life in ways that the facility does not, and are above and beyond the care provided by the facility."

If you are caring for your loved one either at home or in a nursing home, a personal care contract is something you might want to discuss with your elder law attorney, who can carefully craft it to preserve assets.