The Internal Revenue Code § 61 defines gross income as ”. all revenues from any source, including (but not limited to) the following items: (1) remuneration for services, including fees, commissions, ancillary services and similar items … Even if the parent already lives in a nursing home, the child can provide the services they need. Practical care in a nursing home is limited to a few hours a day. The child can supplement the parent`s care, for example, by taking the parent for regular haircuts, offering transportation to external doctors or family events. Payment for services under a personal services contract is based on the resident`s life expectancy and is paid in advance to the caregiver in the form of a lump sum payment. (2) A trusted person who provides care services to that person, usually an adult child. Personal service contracts are very popular in long-term care planning, especially when Medicaid benefits are requested. But this may not be the best solution. What kind of care would the caregiver provide? Some examples of the type of care that falls under a personal care agreement include things like grocery shopping, medication monitoring and management, health tracking, and meal preparation. Even if the person in need of care has visited a long-term care facility, these agreements are still valid and the caregiver can continue to provide services, such as delivering .B personal belongings or cooperating with in-house medical staff. The only restriction on signing a family care agreement before applying for Florida Medicaid is that the contract must be valid. That is, the caregiver must already support the prospective Medicaid applicant.
Gainesville Medicaid planning lawyers at Miller Elder Law Firm have experience in all areas of elder law. Their knowledge and experience help them support clients with their older legal needs. such as using personal service contracts to qualify for Medicaid. You may be wondering how this can help meet the requirements for admission to Florida Medicaid programs. Here`s an illustration of how a personal service contract can help you meet your eligibility criteria: Life expectancy creates the greatest financial strain when you use a personal service contract as part of a Medicaid planning or Qualification Strategy. The older a person is, the lower their life expectancy. The lower their life expectancy, the less money can be transferred to the caregiver. The less money can be transferred to a caregiver with impunity, the more we have to rely on other Medicaid strategies that may not leave as much money in the family.
One of the most common strategies to protect Medicaid assets is a personal care agreement or caregiver agreement. These are two terms that mean the same thing – an agreement between an elderly person and someone else (usually a child) that the child will take care of their parents for money. And while it sounds cold and heartless, the real purpose of the deal is to transfer money from the parents to the child, advance the inheritance in some way, and at the same time exhaust the parents` assets so that the parent is immediately eligible for Medicaid. As you can see in the illustrations, a personal service contract can actually reduce the applicant`s assets and help them meet Medicaid eligibility requirements in Florida. It has been established under Florida law that a personal service contract that has been properly created is not considered a gift. Therefore, this transfer will not impose a penalty on the applicant, making it an invaluable tool to help Medicaid applicants in Florida legally spend their assets. One of these measures is called a personal service or life care contract. This legal contract establishes the compensation that a family member receives in exchange for lifelong personal care and supervision of the nursing home resident`s professional care.
Medicaid rules and family status will dictate the amount of compensation that can be paid. Experienced Medicaid planning attorneys at Gorman & Jones, PLC can draft the personal service agreement required to ensure your Eligibility Requirements for Medicaid in Florida are met. Contact the law firm of Gorman & Jones, PLC in Tampa at (813) 856-5625 for honest advice and answers to all your personal questions about service contracts. As convenient as it may be to simply list the disqualifying value of the assets you own as a tariff under a personal service contract, it`s just not that simple. As part of a personal service contract, the caregiver must receive a ”fair rate.” Fortunately, there is a calculation that was created to generate a fair price as part of a personal service contract. The calculation is as follows: If the beneficiary dies before the end of the contractual period, the funds paid to the caregiver remain in the caregiver`s funds. Medicaid does not have the right to claim. Longevity.
The amount that can be paid prospectively to a caregiver for a 90-year-old is obviously less than the amount that can reasonably be paid for a 70-year-old. Medicaid requires that the lifetime agreement period be actuarially sound, using the Social Security life expectancy chart. As you can see, if a personal service contract makes sense in terms of overall planning, the younger the beneficiary at the beginning, the more it will help reduce wealth. Life expectancy is calculated using florida Medicaid life expectancy tables. The sooner a personal service contract is signed, the better it is for Medicaid planning purposes. You will notice that the link above refers to two different life expectancy tables. Indeed, the care agreement is intended to protect SSI, and then another life expectancy table must be used as the basis for calculating the fair market value of a personal service contract. The personal services contract must be formal and written. The caregiver must provide these services and keep detailed and accurate records. Documentation must be provided showing that these services were provided, how many hours were spent on these services, etc. Medicaid diligently reviews these contracts and the reports submitted.
The value of the services provided. The value of these services must be realistic and in line with the current labour market. For example, you can`t say that driving your mom to the grocery store twice a week is estimated at $5,000. The personal services contract is ”enforceable” so care services must be provided ”as needed” in order to be used at a later date. The services provided must not overlap with the services already provided by the assisted living facility or nursing home. However, it is important to note that the Medicaid Care Agreement does not only apply to residents of nursing homes. Personal service contracts can be used to obtain eligibility for Florida Medicaid Waiver (i.e., Community Medicaid) applicants who require financial assistance to pay home health care and assisted living bills. Often, my Medicaid clients live with an adult son or daughter who cooks, cleans, helps with the bath, takes them to doctor`s appointments, etc. These are candidates to the idea who would benefit from using the personal service contract/family caregiver agreement on Medicaid`s planning strategy. The contract specifies how many hours per week the caregiver will perform and what type of services will be provided. Services do not need to be medical in nature.
They can only be sessional documents where the aging person and potential Medicaid applicant need help. Examples include driving a parent to their doctor`s appointments, delivering meals, cooking, shopping, paying bills, checking insurance claims, cleaning homes, and more. If your goal or that of your loved one is to apply for Medicaid to receive government support, a personal care agreement can help you qualify for the program. This type of agreement allows you to pay a caregiver for future services in order to legally issue assets. This means you can pay a caregiver today for the services you expect to need six months or even three years later. This allows for a lump sum payment instead of having to slowly deplete assets over time. Due to the nature of these caregiver agreements, timing is not everything. If you set them up early, you`ll have more time to spend money on Medicaid eligibility, but if you`re preparing for a Medicaid contingency plan — trying to quickly scale down assets to qualify for Medicaid as soon as possible — these agreements are still valid and are used frequently. When done right, personal care agreements are a strategic way to transfer wealth to your heirs, protect your assets, and make sure you can qualify for Medicaid. These agreements are a powerful tool in any asset protection arsenal.
The personal services contract then becomes a useful tool to help the Medicaid applicant legally spend their assets to qualify for Medicaid in a way that would not impose a penalty. The courts have held that a properly worded and fair personal services contract is not a gift and is entirely appropriate. It is not necessary to sign a personal service contract only when a senior is immediately ill and faces huge long-term care costs (although we, the lawyers for the elderly, often have to work on this basis). Signing a personal service contract as part of pre-planning (instead of crisis planning) allows the pre-planner to achieve this higher life expectancy. This allows more assets to be transferred from the Medicaid applicant`s name when it comes time to qualify and apply for Medicaid. Since life expectancy is a factor that determines the fair rate under a personal services contract, the older an applicant is when creating a personal services contract, the less they can transfer under this document[…].