Question: My adult child takes care of me so I can stay in my own home. Should we have a Contract?
Answer:
It is wise to have a Contract called a "Caregiver Agreement" for several reasons. If you have an Agreement,the payments to your child for services shouldn’t be considered a gift, if you ever have to apply for Medicaid. Without the Agreement, your application for Medicaid may be delayed for months because the funds you paid your child will be considered gifts. A penalty period must be served if any gifts are given within 5 years of applying for Medicaid. An Agreement can also prevent a dispute between your children if the Agreement clearly explains the types of services you are receiving and the payment is reasonable. You should be able to prove that the payments are reasonable by comparing the cost of hiring someone else from a private agency to the amount you are paying your child. The Agreement should be drafted by an elder law attorney who is very familiar with the recent changes in Medicaid law and recent rulings on Caregiver Agreements.
