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Personal Care Agreements and Medicaid Planning

Personal Care Agreements: Don’t Try This Without An Elder Law Attorney

You might have received a flyer or, seen a newspaper ad advertising Medicaid planning for a very low fee. It catches your eye. You maybe go so far as to meet with the person (a non-attorney) and they tell you “Yes. We can prepare a personal care agreement, a qualified income trust and the Medicaid application.” What should you do?

If it sounds too good to be true, it is.

Be an informed consumer. Avoid persons who do not have a law license. . You could find yourself a victim, paying the fee and still not qualifying for Florida Medicaid assistance. Even if a social worker or other professional tells you they have been doing this a long time, the reality is they don’t know the law, the exceptions or the nuances involved.

A personal care agreement can help a family qualify a loved one for Medicaid to pay for long-term care, if it is done correctly. When the right set of facts exists in a family and a personal care agreement is properly drafted, it can preserve assets that can be used to maintain a home or supplement the quality of care that the person receives. A family member caregiver can be compensated for legitimately performing services such as: maintenance of the home, vehicle; bookkeeping, bill paying, tax return services; overseeing and coordinating the elder’s care. There are other services that are not compensable such as visiting a parent.

When you meet with a qualified elder law attorney such as myself, we’ll analyze the pros and the cons of this planning option, among others options. We will discuss the tax consequences as well. I will have you maintain a time log for several weeks which we use to calculate the value of your services (using a reasonable generally accepted hourly rate) over the course of your family member’s life expectancy. Together we’ll determine and implement the best course of action for long-term care planning.

The State of Florida Medicaid agency is looking to limit the ability of families to use personal care agreements in order to prevent abuse. We expect personal care agreements to be more closely scrutinized by Medicaid’s attorneys. That is why you should only consult with a qualified elder law attorney. When a personal care agreement is not done properly or, cannot be justified, your loved one may be disqualified for Medicaid and be forced to use diminishing assets for their care. Don’t be penny wise and pound foolish when you need competent legal guidance. Do it right the first time!

Stephanie Schneider was quoted in the Wall Street Journal MarketWatch article: The Quality Gap at Elder Care Homes.