Unfortunately, care for elderly people who are unable to care for themselves eats through any estate monies, often means patchy and less-qualified care for the elderly person until he or she qualifies for long term Medicaid coverage, and allows no compensation for family members who donate their time and energy to help the elderly person.
Now there is a way to compensate family members who give personal care to an elderly member of the family, the care giver contract. A care giver contract allows the elderly person to pay his or her relative(s) for care at an hourly care. Estate monies do not go out the window. More compassionate care is afforded the elder person, and family members can be adequately rewarded. Once monies are gone, the elder person will be enrolled into a Medicaid program and will receive his or her monies for further care from the government. Even then, if the care giver contract is well-done, some states have Cash and Counseling Programs that will allow Medicaid enrollees to continue to pay family members for care. (Check with your state’s department of social services.) ,/p>
How does a family go about getting a contract that will allow this practical use of a person’s assets for care?
You should start with an attorney because not all contacts will pass muster with Medicaid. The average attorney fee for this purpose is $500, but other aspects of estate planning can be part of that fee, for example designating power of attorney.
One simple and straight-forward sample of a care-giver’s contract can be found at the Utah Coalition for Caregiver Support.
It is best to make such a contact before the elderly person is incapacitated. However, a power of attorney can make such a contract if the elder person is unable to do so.
The contract should be specific about naming who will be giving the care and what is expected of the caregiver. These duties might include such things as housekeeping, preparing meals, paying bills, offering transportation, arranging for doctors’ appointments, etc.
Ask your attorney to create a contract that will not require the elderly person to withhold Social Security or pay unemployment taxes.
Compensation can not be determined to be at an inflated rate. Elderly care can range from $15 an hour to $100 dollars an hour. Make sure to check with local care-giving agencies to find out what the average rate is in your area. It is also best not to award the designated caregiver a lump sum in advance. The caregiver must also recognize that he or she will be receiving income which will be subject to taxes.
Once should not go about trying to make such a contract without legal advice.