Are you your parents’ caregiver? – Get it in writing!

Many people spent countless hours providing care services to parents or other family members, sometimes moving out of their homes or giving up their jobs to do so.  Did you know that you could arrange to have them pay you, and if you do, you could be doing them a favor?

Click on this link for an excellent piece that aired on this topic on NPR’s Marketplace on March 18:  http://marketplace.publicradio.org

Although most of us  don’t plan to rely on Medicaid to care for our parents if they become ill or incapacitated, for families with modest savings, it may be a necessity.  However, as it says in the Marketplace piece, Medicaid will not cover the cost of care until most of the savings are gone.  Having your parents give their money to you is not a solution, because Medicaid will impose a penalty.  But if you contract with your parents to provide specific services (say, at the same rate that they would pay a non-medical care agency), then the money they pay you for those services is not a gift, so it doesn’t result in a transfer penalty.

If this makes sense for your family, you should consult an Elder Law Attorney to help you navigate the requirements of your state’s Medicaid rules, and draft an appropriate Personal Service contract.  You should also consider factors such as whether you should be an employee or an independent contractor, and the tax implications of those choices for both you and your parents.

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