Column Risk of being a caregiver It may sound strange but there are significant legal and financial risks that a caregiver can assume if they are not careful before entering into a caregiving arrangement for a loved one. It is important that you enter into a caregiving situation with your eyes wide open and understand all options that are available to you. This is extremely important if a parent moves into an adult child’s home or the adult child moves into the parent’s home in order to provide care. It is vital that a legal contract exist between the caregiver and the senior receiving care. Many families do not take into account the importance of the care contract. Some are put off or intimidated by the legality of the agreement. It doesn’t have to be complex, but it must be in place. When I was an Assistant Attorney should they apply for benefits. Having a care contract in place also ensures Daniel O. Tully General for the State of Connecticut under then Attorney General Joe Lieberman, among the many things he taught me was that the law can and must be explained in everyday language. Senator Lieberman further noted that explaining the law in a way that everyone understands enables all to have their rights protected. This is the cornerstone of our elder law practice. Millions of Americans are currently caring for an elderly family member or friend at home, without receiving regular compensation. Depending on the circumstances, however, it may actually be beneficial for both parties to enter into a care contract where the caregiver accepts payment for the care they are providing their loved one and also formally assumes responsibility for that care. For example, as the loved one you are caring for reaches a point where nursing home placement is the only option, all of their money will be considered available to pay for their care at the nursing home and they will not be eligible for Medicaid assistance until all of their assets have been depleted. Certainly the care they were provided by you, while they remained in the community, is just as valuable to them and worthy of payment as that provided by the nursing home. With a care contract in place, they can pay the caregiver and every penny will count toward their “Medicaid spend down” Medicaid will not impose penalties on the money received by the caretaker. Sometimes an elderly person will randomly give sums of money to their caregivers as payment for the care they provide. Without a contract in place, Medicaid will assume the money transferred as a “gift” or a “transfer of assets” and will impose penalties resulting in ineligibility for Medicaid benefits. From a caregiver’s perspective, although they are willing to provide services for free, it is often difficult for them when, at the time of their loved one’s passing, the caregiver receives the same inheritance as the other heirs who may not have been involved in caring for the loved one. On the flip side, if a caregiver is receiving payment and there is no contract in place that defines the care they have been working hard to provide, other heirs may be upset by the additional monies the caregiver received. The bottom line: If you are caring for a loved one or are receiving care from a loved one, a care contract is a good idea for both parties involved, for multiple reasons. Before entering a contract, be sure to consult someone experienced in drafting such contracts and who is knowledgeable with respect to their effect on Medicaid qualifications. Also, if you have been caring for your parent for over two years, there is another Medicaid planning method that may be available that allows your parent to transfer the parent’s home to you without incurring Medicaid transfer penalties. This is not true in all cases, but if you and your parent meet certain criteria, the exemption known as the “caretaker child exemption,” could be a great way to ensure your parent’s home stays in the family. Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol. Contact him at 860-583-1341. ktelderlaw. com. Ktelderlaw.com IF LAUGHTER IS THE BEST MEDICINE THEN A SMILE IS PART OF THE CURE High Quality Care is not complete without the kindness and compassion of a dedicated staff. At our center, we strive to provide excellence in care with the friendliest of smiles. 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