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.
Contrary to popular belief, nursing homes do not provide the bulk of care for the elderly and disabled. The truth is, family members are the primary caregivers, caring for the elder and disabled at home and often making huge sacrifices to do so. Depending on the level of care required, family caregivers may experience financial stress, some of which could be relieved with financial compensation.
Family caregivers can be paid, and if properly structured their compensation can help protect the assets of the elderly or disabled person as well. 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 can disqualify the applicant from receiving Medicaid for a certain period of time known as the penalty period. Compensation paid under the terms of a properly-structured Caregiver Agreement, however, would not trigger the 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, the obligations of the parties, and payment must be based on the going rate for care giving in the county of residence. Additionally, care must be actually needed (preferably documented with a doctor’s note), actually provided and documented.
Read an excellent article about caregiver agreements in THE HUDSON VALLEY TIMES HERALD-RECORD (August 22, 2010), by clicking the link below: Protecting Your Future: Caregiver Agreement Protects Assets