When one family member becomes a caregiver for another, it''s important to put in writing the terms of the arrangeme....Read more
Always Put Caregiver Contracts in Writing
- March 27th, 2015
When hiring a caregiver, it is important to put the contract in writing. Courts can be especially strict about requiring contracts when caregivers are relatives, but a formal agreement is still necessary even if the caregiver is not a relative. A recent Michigan court ruling illustrates how failing to document an agreement with a non-relative caregiver can affect Medicaid benefits.
Jason Jensen hired a caregiver for his grandmother, Betty Jensen, who suffered from dementia. Mr. Jensen and the caregiver had an informal agreement and no contract was signed, but Mr. Jensen paid the caregiver a total of $19,000 from Ms. Jensen's assets over the course of the months she worked for Ms. Jensen.
Local Elder Law Attorneys in Ashburn, VA
The Estate Planning & Elder Law Firm PC
Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
When Ms. Jensen's condition worsened, she entered a nursing home and applied for Medicaid. Because there was no written contract in place, the state considered the payments to the caregiver to be transfers that were made for less than fair market value. Due to the transfers, the state established a penalty period before Ms. Jensen could qualify for Medicaid. Ms. Jensen died before the penalty period ended.
Mr. Jensen appealed the state's decision to court, and the trial court decided in his favor, ruling that the state Medicaid regulation requiring that a caregiver contract be in writing applied only to relative caregivers. The state appealed this ruling.
The Michigan Court of Appeals reversed the trial court's decision, stating that it was bound by the regulations, which require that caregiver contracts be in writing, even for a non-relative. According to the court, because there was no written contract, the payments to the caregiver were unlawful. To read the coourt's decision, click here.
If you are hiring a caregiver, even for a few hours a week, it is important to draw up a formal agreement, especially if you think you will ever apply for Medicaid long-term care benefits. To get help drafting an agreement, contact your attorney.
Last Modified: 03/27/2015