1) Veterans Aid and Attendance benefit. The VA will offer pension payments to wartime veterans or their surviving spouses if the claimant has sufficient “unreimbursed medical expenses” or “UME.” When the caregiver provides ADL assistance or a safe supervised residence due to the cognitive impairment, then that assistance may be a UME. However payments must be actually made according to an agreement.
2) Michigan Medicaid Nursing Home benefit. If a parent lives with a child caregiver before going into a nursing home payments to the child will be considered “divestment” unless supported by a contract meeting the Medicaid department’s specifications.
3) Avoid caregiver being accused of financial elder abuse. Many conditions require 24 hour assistance and that can prevent the caregiver child from other employment. Such 24 hour service will cost thousands of dollars a month when performed by commercial agencies. Yet if the child takes any money for compensation or reimbursement the child is open to charges of financial elder abuse under the theory the child took advantage of a helpless elder. A contract addresses this situation.
4) Avoid probate battles by children on death of the parent. Caregiving is a lonely job – very often the caregiver feels the siblings do not lift a finger to help. Add to this fact the family dynamics between siblings and the caregiver may start limiting access to the parent. The result is even more emotion by the siblings who feel they “don’t know what’s going on” and “she’s after mom’s money.” Often the caregiver is joint on the bank accounts of the parent. Then, when the parent dies the caregiver will not share with the others because “they don’t deserve it.” Probate battles ensue. The money goes to lawyers and the children are bitter enemies for life.
All of these problems can be avoided with a little thoughtful planning at the onset and recording family agreements in a contract.
More questions? Give me a call,