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College Station Elder Law Attorney on Things to Know Before You Hire a Caregiver

Posted by Chris Peterson | Mar 08, 2021

Caring for an elderly loved one is hard work. Especially if you are working and have a family of your own to care for. It's okay to hire someone to step in and help if you are feeling overwhelmed or have other obligations. Before you do, there are some important things you should consider.

Eventually, your loved one may need skilled long-term care that requires a nursing home. Nursing home costs continue to rise. Due to the pandemic, we could see record increases in the cost of skilled care facilities in 2021. Even if your loved one has a long-term care insurance policy, it may not be enough to cover the cost of care. Your loved one may need to qualify for Medicaid to cover the cost of a skilled nursing facility.

Keeping that in mind, it is important when hiring a caregiver 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 related.  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. 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.

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 the court, and the trial court decided in his favor ruling that the state Medicaid regulation requiring that a caregiver contract is 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.

A caregiver contract should include the duties performed, the amount of time or hours spent performing the acts of caregiving, and how reimbursement for expenses will be allowed.

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. If you need help with the contract to be sure it is Medicaid compliant, contact us at 979-703-7014 to speak with a College Station elder law attorney today!

About the Author

Chris Peterson

Chris Peterson is the owner of Peterson Law Group. He practices primarily in the areas of wills, trusts and estate planning; probate and trust administration; elder law; and business law. Chris is also the owner of Brazos 1031 Exchange Company.

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