Personal Services Contracts
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A Medicaid Planning Tool
Personals Services Contracts are also known as a Family Caregiver Agreement. These kinds of agreements are a popular Medicaid planning strategy. A personal services agreement is a contract between the Medicaid applicant and a designated caregiver for services not provided by a skilled nursing facility. The caregiver is usually a family member, but it can be anyone. The caregiver does not need formal caregiving training or experience. This kind of agreement is not just for residents of nursing homes. Personal service contracts can be for Medicaid recipients living with adult children who provide a majority of their care. |
Why use a personal services contract?
If the Medicaid applicant were to give a lump sum payment to their caregiver, as happens under a
personal services contract, Medicaid would consider this transfer as a gift. This gift would cause a
penalty to be incurred, which can result in a hefty payment needing to be made to Medicaid. If this
payment is made under a personal services contract Medicaid will not treat it as a gift.
Personal services contract can be used as a tool to help the Medicaid applicant legally spend-down their
assets in order to qualify for Medicaid in a way that does not incur a penalty.
Even though an adult child may be willing to help a parent out of love for no money, being a caregiver
can take up a significant amount of time and be extremely difficult. Considering a personal services
contract may enable them to work less to provide more hours for care or benefit the family in another
way.
What are the benefits of a Medicaid personal services contract?
I have questions about personal services contracts
Parks and Meade has an experienced estate and trust attorney that can answer your questions. Schedule your consultation below or call 614-389-1038.
If the Medicaid applicant were to give a lump sum payment to their caregiver, as happens under a
personal services contract, Medicaid would consider this transfer as a gift. This gift would cause a
penalty to be incurred, which can result in a hefty payment needing to be made to Medicaid. If this
payment is made under a personal services contract Medicaid will not treat it as a gift.
Personal services contract can be used as a tool to help the Medicaid applicant legally spend-down their
assets in order to qualify for Medicaid in a way that does not incur a penalty.
Even though an adult child may be willing to help a parent out of love for no money, being a caregiver
can take up a significant amount of time and be extremely difficult. Considering a personal services
contract may enable them to work less to provide more hours for care or benefit the family in another
way.
What are the benefits of a Medicaid personal services contract?
- Gets assets out of the Medicaid applicants name without penalties to qualify for Medicaid
- Can be used as a form of estate planning to pay a family member that would have inherited the
money regardless - Can keep the money in the family instead of being paid to the nursing home
A personal services contract can be tricky to draft and dealing with Medicaid is always tough. Have
experience on your side and call us today or schedule your consultation below.
I have questions about personal services contracts
Parks and Meade has an experienced estate and trust attorney that can answer your questions. Schedule your consultation below or call 614-389-1038.
