All too often, families put off coming to our office until Mom has already been admitted to a nursing home or is on the verge of being admitted.  So often in these cases we hear the story about how the family has been caring for Mom, for months or even for years, without compensation.  Often a caregiver has quit a job at considerable financial hardship.  Now Mom will be admitted to a nursing home and her savings will have to be spent down and depleted before Medicaid will pay for her care.

These families have missed out on a golden opportunity.  Had they planned in advance, Mom could have compensated her caregivers with money that will now go to the nursing home.

Gifting of assets is very problematic for a person entering a nursing home. It can cause them to be denied Medicaid.  What we call a gift, Medicaid calls “a transfer for less than fair consideration,” in other words, Mom gave away money or assets and did not get something of comparable value in return.  Medicaid penalizes transfers.

Paying a caregiver is not a transfer for less than fair consideration; instead, it is compensation for services rendered.  Mom is allowed to pay someone (even a friend or relative) to provide her with needed services.  This is permitted by Medicaid law and no penalty will be triggered provided it is done properly.  The first step in doing it properly is to have a written agreement at the outset of the arrangement.  Unless there is a written contract when the services are rendered, the law presumes that the care was provided out of love and affection with no expectation of compensation. Any payment made after the fact will be considered a gift, no matter how hard the caregiver worked.

Services do not have to be skilled or medical in nature in order to be compensated.  The types of services for which Mom can pay a caregiver include, by way of example, housekeeping, laundry, food shopping, meal preparation, help with taking medications, being driven to the doctor or to church, assistance with bathing or other grooming tasks, and financial management.  The list goes on and on.

Here are the steps to follow in setting up a family care agreement:  1) there must be a written, legally binding, and properly drafted and executed contract; an oral agreement will not work; 2) Mom must be evaluated to determine and record her care needs; and 3) the amount of the caregiver’s compensation must be comparable to what is being charged in the marketplace.

The attorneys at Levandowski & Darpino can draft an appropriate caregiver agreement that will satisfy the requirements.

A durable power of attorney is a document where you name the person who will make your financial, healthcare and end-of-life decisions when you are unable to.  In Pennsylvania, the person who you name as your decision-maker is called your “agent.”  Here is why everyone should have a durable power of attorney:

• You decide who your agent will be in case of serious illness or incapacity.
• Avoid court supervision of your affairs (without a durable power of attorney, a court must appoint a guardian to make decisions for you).
• A “durable” power of attorney remains in effect even after you become disabled or incapacitated.
• Your agent is obligated by law to act in your best interests.
• A power of attorney can be revoked at any time if you are not happy with what your agent is doing.
• Executing a power of attorney does not mean that you can no longer make decisions for yourself; you continue to make your own decisions and handle your affairs as long as you are capable of doing so.

It bears repeating that, if you do not have a power of attorney or if your power of attorney is not drafted properly, and something should happen that results in your inability to make decisions, your family will face one or more court proceedings and a court-supervised guardianship.  Court proceedings are costly and time-consuming.  In addition, the guardian’s powers will be limited and carefully monitored by the court and the person appointed as your guardian may not be the person who you would have chosen to act on your behalf.

One final note:  You may want to consider what elder law attorneys sometimes call an “enhanced” power of attorney.  You can supercharge your power of attorney by giving your agent the ability to take advantage of asset protection strategies should you need long-term care in an assisted living facility or a nursing home.  In Pennsylvania, such a power of attorney has to be worded just right.

Welcome to the official Levandowski & Darpino blog. This is an exciting time for us because our law firm is rolling out several new communication vehicles. Within the past month, we went live with our new website, PaElderLawNow.com, a site that includes many valuable resources for those interested in elder law in the state of Pennsylvania. We also have a very informative email newsletter that we offer. We have recently rolled out the Levandowski & Darpino Facebook Fan Page and the Levandowski & Darpino Twitter Feed. And of course, here you are, on the new Pa Elder Law Now Blog. We hope you enjoy it.