CAREGIVER AGREEMENTS

Whether for a possible future Medicaid application or family harmony, a caregiver agreement (or personal service contract) is an essential tool when a family member takes care of another for long term care needs. It also may be the only permissible way to transfer assets to related caregivers without violating the Medicaid transfer rules. Medicaid ineligibility, family disharmony, and caring for a loved one without compensation, are just some of the many potential problems a caregiver agreement may alleviate.

The government looks five years prior to one’s application for Medicaid assistance for transfers of assets. Transfers without adequate payment in return – gifts – are one means of disqualification for Medicaid assistance. Without a legally enforceable agreement for services, compensation for caregiving services will be an impermissive transfer. Written agreements must precede the compensated services to avoid disqualification.

Often one family member, usually a daughter or niece, assumes the task of caring for an elderly family member. Other family members are unaware of the sacrifices, reduced income and stress that befall this younger family member. According to a 2004 AARP study, 44.4 million adult caregivers provide unpaid care to seniors or adults with disabilities. These caregivers expend an average of 21 hours a week for an average period of 4.3 years.

A written, dated, thorough, properly drafted document spelling out all services to be performed, makes it clear to other family members that there is an agreement and that compensation will be paid in return. The fee for services, if Medicaid is to be considered, must conform to costs for like services in the market place. Caregivers are well advised to document everything, not only entries in a diary but receipts for expenses and miles driven, especially if the caregiver’s car is used. Since this is a legally binding contract, it should not be treated lightly. It must contain the legal elements of a contract, fairly and adequately present both sides of the agreement and be drafted to anticipate potential litigation issues, particularly upon the elder family member’s death. Uninvolved family members may be the first to allege wrongdoing. Having the senior family member discuss the matter with all family members could help prevent any potential debacle. Often a family meeting with an elder lawyer to explain the issues is helpful. If the senior applies for Medicaid assistance, the lawyer drafting the agreement must also consider numerous federal and state factors.

If there is a caregiver arrangement in your family, consider a caregiver agreement.