Question: How much can an elder pay their family members to provide them with long term care? I am assuming this is permitted. I would prefer to pay my family than to pay a home care company for this type of personal care.
Answer: What you are referring to is what is called a “Personal Services Contract” that changes what would normally be treated as a “gift” into a bargained-for exchange of your property for the return of services by your children, grandchildren, brothers, sisters, and others. Most of the services include many things that those caregivers are already doing for you. They include the following: cooking, cleaning, laundry and taking you to the doctor, taking you for medical tests, health monitoring, meeting with doctors about the medical care that will be needed, etc. Taking the ill parent on trips, providing entertainment, visiting with you. They may also include bathing you and dressing you and assisting in your toiletries. If in the hospital, then visiting with you in the hospital and making arrangements for others to visit you. Answering letters that you receive, paying bills (under the authority of a current durable power of attorney) and writing letters for you. These are the normal activities that are included in the “Personal Services Contract”, but there may be additional items based upon your individual needs.
The next thing is to determine your life expectancy based upon the SSI Life Expectancy Tables. This will indicate statistically how many years and months someone of your current age is expected to live (you may be live that long or you may live even longer). Next, you need to determine how many hours will be necessary to carry out the various duties under the contract on a weekly basis. Normally, we would expect 4 or 5 hours per day seven days a week. Of course, this may vary depending on the circumstances. If it varies too much, then Medicaid may question the hours so you had better keep some kind of journal or calendar where you routinely write down the expended each day and what activities are undertaken on that day.
Lastly, you need to have an idea of what homecare workers charge in your area. The best way to do this is to discuss it with an experienced elder law attorney in your area, but, if you cannot find one then you will have to make some calls to find out this information. It is much easier to go to a qualified elder law attorney as he will already have this information and it would, of course, have the attorney draw up the agreement to meet with your state’s requirements.
The amount of money that can be protected is figured out this way. 1) The number of hours each week, 2) times the average hourly rate, 3) times 4.3 weeks to give you the monthly total for services rendered, 4) times 12 months to give you the annual total for services rendered, 5) times the life expectancy of the elderly person. In most instances, I have found that there is usually not enough money to cover the full funding of the contract. This is a good sign as it will show that the elderly person is receiving more services than he or she is actually paying for. In other instances, the hours per week might have to be increased or the average hourly rate must be increased or both.
As always, you can use the ElderCare Matters website – ElderCareMatters.com – to find a list of attorneys and other types of caregivers in your area.
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