Written by Brandon Thomson
It happens quite often. A child or family member ends up caring for their parent or loved one who needs long-term care assistance. Most of the time, the caregiver is doing it out of the goodness of their heart. Mentioning that the caregiver could get paid to care for their loved one can make the individual feel uneasy. However, this is a very common way that people could potentially use the long-term care Medicaid system and can “spend down” their assets to eventually qualify for Medicaid.
The key to this situation is the Caregiver Agreement. Since 1996, Michigan Medicaid regulations provide that payments to a family caregiver are not a divestment (penalty for gifting assets), if there is a written obligation (caregiving contract) and payment is made when services are rendered.
Under Michigan law, for a caregiving contract to be presumed not to be divestment, a contemporaneous written and notarized contract must exist. Payment for the services provided must be made when services are rendered. The contract may not include payment for past care or future expenses or services (no prospective payments). The contract must cover care delivered in the home. In addition, the regulations have required a physician’s letter and formal plan of care with compensation commensurate with community standards.
The lesson of the story here is that if a loved one who needs care wants to pay a family member to care for them and Medicaid is potentially in his or her future, they must have a Caregiver Agreement that complies with the Medicaid rules. The Probate ProSM has attorneys experienced in this work and can help any individual in a situation such as this.
The Probate ProSM provides caregiving legal services related to guardianships, conservatorships and other probate related matters. If you or someone you know needs help with making sure a family member is being paid for the caregiving work they will be doing, call us today at 1-(877)-YOUR-FIRM.
