A Personal Care Agreement is a legal contract for service to be provided between a caregiver and a care recipient.  This contract may be called a Caregiver Agreement or Personal Services Agreement, but they all mean that there is an employer-employee relationship between the two individuals.

What makes this agreement unique is that it is often used between relatives, for example, a parent and child.  Let’s take a real world example:

Bill and Mary Jones are a married couple and they have two children, Susan and John.  Bill and Mary live in a single family home in Anne Arundel County, Maryland.  Bill has Alzheimer’s and is in need of 24/7 supervision and assistance with activities of daily living.  Mary has Parkinson’s and is also in need of assistance with activities of daily living.  Susan and John have been taking turns caring for their parents for a few months now and it would appear that it would be better if Susan moved in with Bill and Mary and continued to take care of them. 

Susan was employed full-time, but had to stop in order to take care of Mom and Dad.  John is married with two kids and has a full-time job.  If Susan moves in with Mom and Dad, she will care for them in the home and they won’t have to be transferred to an Assisted Living Facility or Nursing Home, at least for the time being.

The Personal Care Agreement will accomplish a number of goals.  First, Mom and Dad will remain in the home and be cared for by their daughter.  This will alleviate the need to transfer them to a facility or bring in a stranger as caregiver.  Mom and Dad will pay Susan for the service of taking care of them.  The “facility” for the purpose of the Agreement, is their home.  The Agreement will be for a monthly fee.  This fee should be based on fair market value care in the area.  So, Susan will now have an income which she has to report, but since she had to give up her job to take care of Mom and Dad, this is a trade off she is willing to make.

The type of care or services are generally, cleaning, food preparation, medication management, transportation, assistance with dressing, bathing, toileting, and essentially providing a safe and clean environment for them to spend the rest of their lives in, which Susan was already doing.

The Personal Care Agreement must be in writing and Bill and Mary must pay Susan monthly for her services.  It is best to have an experienced attorney prepare this Agreement to ensure that it will meet all the legal requirements.  Finally, the payments to Susan will not be seen as gifts made to Susan would Bill and/or Mary ever have to apply for Medical Assistance (Medicaid).

If you or a loved one is interested in discussing a Personal Care Agreement, please call to schedule an elder law consultation with one of our attorneys.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  “Personal Care Agreements” by Attorney Paula M. Mattson-Sarli

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

   “Three Important Health Care Directives” by Attorney Colleen Sinclair Prosser

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  What is a look-back period?   When you file an application for Long Term Care Medical Assistance, you are required to provide five years of financial statements documenting transactions in your accounts.  You may also provide five years of tax forms.  The purpose is to determine whether or not you gave away assets during this time frame in contemplation of filing an application for Medical Assistance.  In other words, have you gifted any assets with the intention of impoverishing yourself to qualify for Medical Assistance?

There are several different ways to gift assets.  The simplest way is to gift cash.  When the state agency is reviewing your financial records, a cash withdrawal from an ATM or an over-the-counter cash transaction is questioned.  This could be a gift.  You need to prove that you regularly withdraw the same amount of cash each month as part of your normal routine.  Many adults do not use check cards or credit cards and this may be opening you up to a higher level of scrutiny if you need to file a Medicaid application.

You may need to prove that you did not gift the cash by providing receipts for goods and services.  It is probably good practice for anyone over 65 years of age to keep receipts, especially for large purchases with cash, and keep a detailed accounting for at least five years of financial transactions.

Another way to gift is to add someone’s name to an account or your real estate.  When you do this, you have made a gift for Medicaid purposes and are subject to the five year look-back period.

If you file an application for Medical Assistance during this five year look-back period, you will be penalized.  The penalty is one month of ineligibility for Medicaid for every $6,800 you transferred.  The penalty doesn’t start until you are in a nursing home, apply for Medicaid, and are otherwise eligible.  This means you are qualified for Medical Assistance except for this gift.

Since there are other reasons you may not want to add someone to your accounts or your house, you should meet with a qualified estate planning and elder law attorney before you make any final decisions to take steps to file for Long Term Care Medical Assistance.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  “Gifting and Medicaid” by Attorney Nicole Livingston

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

There is a significant difference in the time required by law to process a Medicaid application and the actual time it takes to do so.  The Medicaid program is not just for the elderly, but also for low-income and disabled individuals.

A recent class-action lawsuit accuses the Maryland Department of Human Resources of breaking state law by taking up to a year to process Medicaid applications. The lawsuit claims to represent 10,000 disabled adults and was filed in mid-January of this year, in Baltimore Circuit Court seeking to force the department to make a decision on Medicaid applications within 60 days as required by law.

Many applicants have health problems, some of which are life threatening and are unable to obtain medical treatment outside of a hospital setting, until the application is processed and approved.  Some individuals cannot receive out-patient critical care and prescription drugs.

According to the state’s own report, as of December 31, 2012 there were 20,007 pending applications for MA-ABD statewide, meaning the state still had not processed and determined eligibility on these cases.  Of the pending cases, 9,940, almost half, were categorized as untimely due to “agency delay.”  Throughout all of 2012, the number of untimely pending cases never dropped below 8,300, indicating a severe and chronic backlog.  As cited in http://www.publicjustice.org/news/press/385 a Public Justice press release.

For those in need of long-term care assistance through Medicaid, they may be in the Nursing Home for six to eight months before the application is processed.  This can be difficult for the families and for the Skilled Nursing Facilities as it puts pressure on them to have paying customers. Legislation was introduced seeking, similarly to the current law suit, simply to have the department make determinations within the legal time limits prescribed by law.   The measure was held with the understanding that the department “was working on the problem.”   Let’s hope that this is the truth.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

  “Medicaid Class-Action Lawsuit” by Attorney Paula M. Mattson-Sarli

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

Recently, AARP wrote an article about titling assets jointly with another person.  The article has generated well needed dialogue about the pros and cons of joint ownership.  The reason that I hear clients telling me they want to name their child as a joint owner on the accounts is to enable access to the money when they cannot.  In other words they are doing so for convenience.  Many legal issues need to be discussed with regard to joint ownership in terms of deeding, probate, gift and estate taxes, inheritance taxes, and creditor issues.

First, in some states, there is an inheritance tax when a child leaves money to a parent.  This was the crux of the article written by AARP.  A mother added her daughter to her bank accounts and then her daughter died.  An inheritance tax was due because Mom received assets from that joint account.  In Maryland, there is no inheritance tax to a parent, grandparent, child, grandchild, or brother or sister.  If all the money was originally Mom’s money and Mom dies, 100% of the value of the account is included in Mom’s estate unless it can be established that the daughter contributed money to the account.

When Mom added the daughter’s name on the account, she made a gift to her daughter.  If Mom needs to file a Medicaid application in the next five years, the adding of the daughter’s name constitutes a gift and will be subject to the gift penalty rules.  Joint ownership means that the daughter automatically receives all the money in that account when Mom dies.  The daughter does not have to go through probate.  If the daughter withdraws money from the account, the IRS considers it to be a gift from Mom.  If she withdraws more than $14,000 per year, then Mom needs to file a gift tax return with the IRS.  Even though the daughter automatically inherits the asset at death, the withdrawal of money by the daughter, which was not originally her own while Mom is alive, is considered a gift.

Another complication is if the daughter is sued, her creditors can attach the assets in the joint account even though they were not hers from conception of the account.   Because she legally can withdraw all the money from the account, her creditors have a claim against the account.

A better solution for access to the account(s) is with a Property Power of Attorney.  As of 2010, Maryland has a Statutory Form that means less hassle with using a Power of Attorney at a bank.  The statute states that as long as you sign the Statutory Form Power of Attorney, a bank cannot refuse to honor the document for reasons such as the document was signed more than five (5) years ago or the document must be on a bank’s form.

A final complication of joint accounts is that you may be disinheriting other children.  For example, if you have two children, a son and a daughter, and you write a Will leaving everything you own jointly to your children, titling of the account overrules the Will.  In other words, when you named your daughter as a joint owner of the account, you disinherited your son.  I often hear, “My daughter will give one-half of the money in the account to her brother”.  However, the daughter is not legally bound to do so.  Experience has shown that once someone has the money, many different sentiments are expressed such as: “Mom added me to the account and I took care of her before she died, so she must have wanted me to have all of the money in the account.”

Emotions can run high when a loved one passes away.   See a qualified estate planning attorney  to ensure your final wishes are carried out in a loving and peaceful manner.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

   “Joint Accounts and Taxes” by Attorney Nicole Livingston

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.

The decision to place yourself or a family member into a nursing home is one of the most difficult decisions you may ever be asked to make. That’s why it’s important, if that time comes, to have a plan and to know what questions to ask.

In a perfect world, you’d have plenty of time to visit the nursing homes, talk to the residents, meet the care staff, sample the food and so on. Unfortunately, we don’t live in a perfect world. Often decisions have to be made quickly and without a lot of information or comparisons.

Our Mission at SinclairProsser Law, LLC is to help our Clients…

 •     Find the right nursing home

•     Get the best care there

•     Pay for it without going broke

In order to accomplish all of this, we use a systematic approach to learn about you, your wants, needs and preferences. Once we have gathered sufficient information, then we are able to determine the type of nursing homes which can meet your needs. But that’s just the start.

Next, you need to know what questions to ask to make an informed choice. Here are some of the basic things to consider:

1.    Is a nursing home necessary or are there alternatives?

In my entire practice as an Elder Law attorney, I’ve never once had a client say they were looking forward to going into a nursing home. Yet, often there are alternatives that people simply don’t know about. Talk to your physician, social workers, and other professionals to see if there are assisted living, home health care, or other alternatives for you.

2.    How do I find the right nursing home?

The best way is to take a systematic approach like we discussed earlier. If this isn’t possible, at the very least, shop around. Personally visit each nursing home you are considering (make unannounced visits) and ask for recommendations.  Call us for a free report Nursing Homes and Assisted Living Guide.

3.    Once I find the right nursing home, how can I get in?

Surviving the admissions process isn’t always easy. Be up front with the nursing homes admissions director, be prepared to tell them all about your situation, including your finances, and be prepared to negotiate.

4.    Who will pay for my care…  Me, Medicare, Medicaid?

Again, it depends upon your personal situation and knowledge of this difficult area of the law. You also have to be sure to take advantage of the special protections available for your spouse, if he or she will not also be in the nursing home. A good Elder Law attorney can help you through this entire process.

5.    Can they make my kids pay for my care?

Not if you handle the admissions process properly. Just be careful not to sign everything that’s put in front of you without a thorough understanding of all the documents.

6.    Once I get in, how can I get the best care there?

The key here is to have a proper care plan in place. That’s a plan developed by the nursing home staff professionals (and you) to determine exactly what kind of care you’ll get. Putting a proper care plan in place is perhaps the most important step you can take… the care plan is part of your contract. If you feel you can’t be the best advocate for yourself, then it’s important to get help from an Elder Law attorney or a geriatric care manager or another health professional.

7.    What are the nursing home’s duties to me?

Ask them for a copy of their duties under the Nursing Home Reform Act. Because of a previous history of inadequate care, in the late 1980s Congress passed laws which outline the minimum standards for health, safety, and resident rights in nursing homes. Chances are you’ll be surprised and pleased to learn all of your rights… but it’s necessary that you take the time to do so. If you’d like, contact us and we can send you further information on your rights as a nursing home resident.

8.    Is there someone who can help me with all of this?

You can get help from many professionals… from an Elder Law attorney to a geriatric care manager, to social workers. Be sure to deal with a professional who understands the broad range of issues that arise when you or a loved one goes into a nursing home.

We offer a variety of services from the most basic educational information to comprehensive legal services and the review of the admissions agreement.  You choose what, if any, services you want and we price our fees accordingly.  We will always tell you up front exactly what our service will cost.

SinclairProsser Law, LLC is a member of the American Academy of Estate Planning Attorneys.