Caregiver Contracts: Kids Paid To Care For Parents

Add comment October 28th, 2009

David Cutner on CBS Evening News

Caregiver Agreements

Add comment October 28th, 2009

A caregiver agreement with a lump sum advance payment can be an effective way of supplementing care in a nursing home while, at the same time, reducing a Medicaid penalty or spend down.  Under such an agreement, the patient pays in advance for caregiver services that the nursing home does not provide, which improves the patient’s well being and quality of life.  The caregiver can be an independent individual, an agency, or a family member.

The keys to creating a caregiver agreement that will be accepted by Medicaid are:  (a) specifically define the services and hours to be provided by the caregiver, (b) calculate the lump sum payment using a reasonable life expectancy and market rates for the services involved, (c) discount the lump sum payment to present market value using a reasonable rate of interest, and (d) require the caregiver to keep a daily log and submit a detailed written invoice of the services and hours actually provided.

In one of our cases, our client was in a nursing home and needed extra care and companionship beyond what a nursing home can provide.  Her daughter was willing to provide these services, so we prepared a caregiver agreement that allowed her daughter to be compensated with an up-front payment.  The arrangement got the mother the extra services that she needed, and benefited the family as well.

In another case, our client was in a nursing home and needed assistance with feeding and other activities of daily living (“ADL’s”) to a much greater extent than is normally available in a nursing home.  We prepared a caregiver agreement between our client and an agency, under which the agency provided the needed services.  The individualized attention given to this client made all the difference in his quality of life.  The agency’s fee was fixed in advance and paid as a lump sum, which facilitated the client’s Medicaid eligibility.

Not Every Estate Plan Works When You Need Long-Term Care

Add comment October 28th, 2009

Estate planning and Elder Law are related but distinct legal practice areas.  In some instances, individuals and married couples will have excellent estate plans that become entirely inadequate if they need long-term care.  The estate planning attorney is not to blame; his client had different objectives in mind at the time.

The current recessionary environment has exacerbated these situations. Even clients with substantial assets have been significantly affected by investment and property losses, in addition to income disruption when employment is terminated. Older individuals have less time to recover from these financial blows. These realities coupled with high estate taxes often create devastating financial scenarios for ill people and their families.

The solution is to have a careful review of any existing estate plan you may have by an Elder Law firm.   Even under normal circumstances, it’s a good idea to have a periodic review of an estate plan to make any necessary revisions based on any changes in your situation or perspectives.  However, when critical illness is a factor, it’s absolutely vital to your economic well-being and security to review and potentially to revise your estate plan.

Wills or trusts may have to be revised or updated.  A Health Care proxy to effectuate your wishes about medical care may have to be drafted.  Typically, these and other considerations need to be examined and addressed.

You can get a better sense of the interface between Elder Law and estate planning by reviewing strategy #18, #19 and #20 in Lamson & Cutner’s Special Report, 25 Strategies to Prevent Financial Ruin from Long-Term Health Care Costs.  There’s also a separate section of the firms website devoted to the topic here.