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Use a Caregiver Agreement to Transfer Cash and Assets.

A Caregiver Agreement is a legal contract between an individual who needs various support services and the party who is to provide them. The caregiver can be a son, daughter or other family member, a friend or a home care agency.

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happy senior woman on wheelchair with caregiverCaregiver Agreements offer a number of advantages and can play an important role in effective planning. First, they’re an excellent way to keep your assets working for you, helping to reduce or eliminate the Medicaid penalties already discussed.

Second, they offer a way for a Medicaid recipient to receive additional care that wouldn’t be covered by Medicaid, and is outside the scope of what a nursing facility or home care attendants can provide.

And third, in the present economic environment, they supply a way for a parent to give financial assistance to children or family members who are out of work or need to supplement their income, without the individuals involved feeling as if they’re taking a handout. In this instance, Caregiver Agreements help to preserve personal dignity on both sides of the contract.

The arrangement works as follows: the patient pays the caregiver in advance for services to improve well-being and quality of life. The keys to creating an agreement that will be accepted by Medicaid are:

– the contract must specifically define the services provided and hours to be worked by the caregiver

– the lump sum payment must be calculated using a reasonable life expectancy and legitimate market rates for the services

– a daily log of actual services rendered and hours worked must be maintained, along with written invoices

– upon the death of the patient, any unearned amounts must be paid to Medicaid

As an example of how these arrangements actually work, Lamson & Cutner drafted a Caregiver Agreement for a client who resided in a nursing home, and needed extra care and companionship beyond what the facility could provide. Her daughter was willing to supply the services, and the firm drafted a Medicaid-compliant contract that allowed her to be compensated with an up-front payment. The happy result was that mother got the extra care she needed, her daughter benefited from the additional income, and the family gained peace of mind. When the mother died, only a very small fraction of the sum the daughter initially received was turned over to Medicaid.

25 Strategies to Prevent Financial Ruin from Long-Term Health Care Costs

  1. You can qualify for Medicaid (even if you don’t think so)
  2. The “Wait and See” Approach can Result in Ruinous Health Care Expenses.
  3. Plan for Home Care and Nursing Home Facility Care while You Still Can.
  4. What’s the difference between Medicare and Medicaid?
  5. It’s NOT too Late for Effective Medicaid Planning (even if you think it is)
  6. Why Hire an Elder Law Attorney?
  7. Don’t Prepare Your Own Medicaid Application
  8. Trusts Can Protect Your Home and Your Money!
  9. Special Trusts for Specific Purposes
  10. Protecting Co-op Apartments Require Special Handling
  11. Evaluate Your 401k or IRA Carefully when Planning for Medicaid
  12. Why Take the Lump Sum Option on Your Pension or Retirement Account?
  13. Choose Your Trustee Wisely
  14. Private Annuities can Help Protect Your Assets
  15. Caregiver Agreements Help Achieve Medicaid Eligibility
  16. Keep Your Medicare Insurance
  17. The Durable Power of Attorney
  18. Elder Law and Estate Planning
  19. The Health Care Proxy vs. the Living Will
  20. How to Choose an Elder Law Firm
  21. Streamline Your Financial Affairs and Record Keeping
  22. New York State is More Generous than Other States
  23. Your Attorney can Help Find the Best Care for You
  24. Long-Term Care Insurance Won’t Necessarily Solve the Problem
  25. Compassionate Elder Law Planning Focuses on Your Future Quality-of-Life!
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