The Importance of The Personal Services Contract

Many elder clients have their child or grandchild or other relative help provide care in the home during their elder years.  Some children even provide housing in their home for their elder parent.  These arrangements must be reduced to writing in order to avoid negative consequences should the parent, at some point, need to qualify for Medicaid.

It is critical that if a child is providing care to an elder parent that a “Personal Services Contract” be signed.  Otherwise, the payments to the child by the elder parent are considered a gift and will disqualify the elder parent for Medicaid.  The “five-year look back rule” will apply and will create a negative consequence and a period of ineligibility.  

The Contract should be recommended and supported by the doctor of the elder relative and it should be detailed in its scope.  The contract should address detailed duties of the care giver such as assisting the elder relative with daily duties like cooking, cleaning, prescription supervision, shopping, house care, yard care, bathing, dressing and errand running.  If there are any questions concerning this contract or Elder Law in general it is best to consult with an Elder Law attorney.  We can help you here in Morehead City, Beaufort and New Bern, North Carolina.