By Estate, Asset and Retirement Tax Lawyer Rick Law of the Estate Planning Center at Law ElderLaw. 

Familial caregivers are typically compensated according to what the state along with your attorney determines to be “Fair Market Value”.  This may prevent transfers of money from one family member to the next from being counted as gifting or Medicaid spend down, when substantive caregiving services were rendered.

Once your elder law attorney has provided an evidentiary basis to prove that the transfer of assets were for fair market value, they still must demonstrate that the transfer of assets was made for reasons other than to qualify for Medicaid or that the elder receiving the caregiving services intended to pay for the services.

Simply providing verbal assurances that seniors were not considering applying for Medicaid when they transferred assets to the caregiver child is not sufficient proof that the assets were transferred for a reason other than to qualify for Medicaid.

It is important to recognize that anyone applying for nursing home Medicaid benefits is burdened by the presumption that any transfer of assets for less than fair market value is deemed to have been motivated by an intent to impoverish oneself to qualify for Medicaid benefits. While the presumption is rebuttable, those who sit in judgment of the evidence are the employees of the state Medicaid department who do not often rule in favor of the Medicaid applicant. The senior needs to have a written personal-care agreement and extensive supporting documentation.

However, even though the parties to the personal-care agreement may have anticipated being forced to use nursing home Medicaid when and if the senior’s assets become exhausted, that does not preclude them from giving “reliable proof” that the senior intended to receive valuable services in exchange for the transfer of assets.

Hearing officers and judges will examine the senior’s personal-care agreement, looking for reliable proof that the assets were exchanged for valuable services. There is some disagreement as to how specific the written agreement must be, but it is best to make the agreement as specific as possible.

In some states, it may be essential that the personal-care agreement be entered into prior to services being rendered. In other states, those reviewing the contract will be looking for specifics such as how long the services will last, how many hours per week, what standards of services are being provided, and what, if any, provisions provide for a refund.

In some cases, those reviewing the contract may investigate whether the services mentioned in the agreement were actually the services that were performed. Thus, while a valid, written caregiver agreement is a necessity, it is difficult to find a universal standard for what must be included in the agreement.

Too many families needlessly lose everything they have.  Don’t let that be you.  If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now, because when you’re out of money, you’re out of options!

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!