Caregiver Agreements Protect Assets
Protecting Your Future: Caregiver Agreement Protects Assets
“Family members overwhelmingly provide the care for elderly and disabled loved ones at home. Although it's a labor of love, taking care of ailing loved ones also has a market value, meaning that caretakers can be paid as a way to protect assets.
Through the use of a caregiver agreement, also known as a personal services contract, the disabled or elderly person can transfer money to family members as compensation rather than as a gift. Gifts to family members made in the last five years before applying for Medicaid to pay for nursing home costs disqualify the applicant from receiving Medicaid for a certain period of time, known as a "penalty period." Compensation to a family member for care does not trigger the same penalty.
“Caregiver agreements must follow strict rules, so they should be drafted by an experienced elder law attorney. The agreement must detail the services to be performed and the obligations of the parties. The payment is based on the going rate of caregiving in that county. Compensation is clearly delineated with hourly and yearly calculations for 24-hour personal care.”
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