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Asset Protection
- "Do I Qualify For Financial Assistance For Nursing Home Care?"
- Free Asset Protection Seminar For Anyone Considering Long Term Care Planning
- Medicaid and Caregiving: Who Are the Ones Taking the Lead?
- Medicaid Compromise in Health Care Bill On the Chopping Block
- Avoid Pitfalls of Medicaid
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- How To Avoid Wasteful Spending On Health Care...
Posted on 4/29/2010 - Health Care Debate: Long Term Insurance Overhaul...
Posted on 1/5/2010 - Survey uncovers surprising long-term care myths and facts...
Posted on 10/29/2009 - Healthcare reform may offer another option for long-term care planning...
Posted on 10/25/2009 - Will Pennyslvania lawmakers divert Medicaid stimulus money?...
Posted on 7/29/2009
Library
Asset Protection
- 10 Reasons to Consider Long-Term Care Insurance
- Solve Eligibility Problems Using the Personal Care Contract
- What Can Seniors and Their Families To Legally Protect Themselves In These Dire Times?
- Gift tax annual exclusion to remain unchanged in 2010. Contact us to see how this factors into your estate plan
- Gift tax annual exclusion to remain unchanged in 2010. Contact us to see how this factors into your estate plan
Solve Eligibility Problems Using the Personal Care Contract
For an asset to be considered transferred for fair market value, the transferor must receive something in return. A transfer for love and consideration, for example, is not considered a transfer for fair market value.
One way to provide compensation for a transfer of an asset is to enter into a written contract for compensation. A personal service contract is an agreement between an elder and one or more people who promise to provide personal care services to the elder. In consideration, the elder either transfers a lump sum payment to the caregiver in advance of the services or agrees to pay the caregiver on a monthly or yearly basis. You should review a personal care contract with an accountant due to the income tax ramifications, and also potential social security and other tax issues.
The caregivers can be professional care providers, friends or family members. When an elder transfers assets under the contract, he or she is receiving fair market value in return for the promise of care. As such, there is no uncompensated transfer and no period medicaid ineligibility.
When creating a personal service contract, the rate paid to the caregiver should be commensurate with the services provided. Those services should be outlined in the contract and may include: geriatric care manager, personal care aide or home health aide, bookkeeper, driver, cook, housekeeper, etc. To determine the rate paid, it is recommended the hourly wage represent the dollar amount which is reasonable in the community for payment of similar care providers. The wage should also account for how much care the elder desires and requires, how much the care provider works or is capable of working and how much money the elder can and wants to spend.
Like most planning options, the personal service contract is not without risk. Many case workers do not recognize a personal service contract as a transfer for fair consideration and could initially deny benefits. You may be required to request a fair hearing.
A personal care contract should be executed in advance of any services being provided. If a lump sum is to be paid, then the yearly rate should not exceed the applicant's life expectancy.
If you have any questions or would like a free consultation call us toll free at 1 800 879 0984 or send us a message through our website by clicking here and we'll be certain to respond.
Elder Law Offices of Shields and Boris
109 VIP Drive
Suite 200
Wexford, PA 15090
Phone: (724) 934-5044
Toll Free: (800) 879-0984
Get Directions
Elder Law Offices of Shields and Boris
109 VIP Drive
Suite 102
Wexford, PA 15090
Phone: (724) 934-5044
Toll Free: (800) 879-0984
Get Directions
