Caregivers Need A Personal-Service Agreement

When elderly parents begin needing assistance in their daily lives, adult children are often called upon to help care for them.  Usually this begins with an adult child helping around the house, paying some bills, running to the store, or fixing meals.  To make it easier to manage their finances, elderly parents frequently give their adult children a financial power of attorney or add them to their checking and savings accounts.  More often than not when this occurs, there is poor record keeping and a frequent commingling of the parent’s and the children’s funds.

When parents are diagnosed with dementia or Alzheimer’s, their care needs escalate, and the demands on caregiving children increase. Many times the caregiving child will reduce hours at work or even quit a job to provide care for an aging parent. 

Many parents and their caregiving children in these situations do not see a need to have a written agreement; this is, however, exactly what they do need.  These informal care arrangements, with their comingling of funds and poor record keeping, can lead to investigations by adult protection for financial exploitation and to sibling claims that the caregiver child is taking “all of mom’s money.” If money is given to the caregiving child without a contract in place, the parent may also become ineligible for Medicaid.

A Personal-Service Agreement can resolve these concerns.  The Idaho Administrative Procedures Act provides that transfers of income to a relative for personal services will result in ineligibility for Medicaid unless the following guidelines are followed:

·        A written contact for personal services was signed before services were delivered. 

·        The contract must require that payment be made after services are rendered. 

·        The contract must be dated and the signatures notarized.

·        Either party must be able to terminate the contract.

·        The contract must be signed by the participant or a legally authorized representative through a power of attorney, legal guardianship or conservatorship. 

·        A representative who signs the contract must not be the provider of the personal-care services under the contract.

·        Compensation for services rendered must be comparable to rates paid in the open market.

Caregiving children should also keep detailed records of the personal-care services that they provide and the expenses that they incur. A written contract and adequate records will protect the caregiving child from claims of financial exploitation by adult protection and disgruntled siblings and will establish that transfers of income to the child complied with Medicaid rules.

We want to wish all a Merry Christmas.

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers life care planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a senior’s legal, financial or healthcare needs, please call us.