Is there a better way to handle the situation? Without question, the answer is "yes!" What the family needs is a caregiver agreement. A caregiver agreement is a written contract, which specifically describes the services to be provided and the terms of compensation. The amount of the compensation, or the fair market value of the asset to be transferred, should not exceed the prevailing rates for similar care or services provided in the community. To the extent that the compensation exceeds the prevailing rate, the excess will be treated as an uncompensated transfer by Medicaid, delaying potential benefits.
For example, assume that Alice is receiving $2,500 worth of long-term care per month from her daughter, Jenny. Jenny, who lives only a few doors down from her mother, helps her to bathe, dress, and eat in the morning. Jenny also makes sure that her mother's medications are taken properly; Alice had a history of taking too many. If Alice needs to go to the doctor's office, Jenny takes her. Most evenings, Jenny brings her mother a meal, does any laundry and dishes, and makes sure that Alice gets into bed. In the morning, the same routine repeats itself.
With Alice being 84 years of age, Jenny believes that her mother will need the same level of care for the next seven years. To adequately compensate her daughter, Alice purchased a single premium immediate annuity ("SPIA") with $210,000 of cash assets. The SPIA is scheduled to pay $2,500 per month for 84 consecutive months - seven years. The SPIA reflects Alice as the "annuitant" and "primary beneficiary,"
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Krause Financial Services specializes in helping families qualify for Medicaid benefits through the use of Medicaid Compliant Annuities, and Veterans Aid & Attendance benefits through the use of various life and annuity insurance products.