Personal Care Agreement Can Protect Assets From Nursing Home Spend Down

The Louisiana Medicaid Eligibility Manual allows certain family members to enter into a written Personal Care Agreement which, essentially, allows money to be shifted to children/caregivers without the parent triggering a five year ineligibility period for Louisiana Long Term Care Medicaid.

When a parent has funds in their name and they transfer those funds to their children, it will typically trigger a five year ineligibility period for Louisiana Long Term Care Medicaid in the event the parent needs care in a nursing home.

However, in the right circumstances, if a child is actually providing care and assistance services to the parent, the parent can compensate the child without triggering the time-penalty Medicaid penalties, SO LONG AS ALL OF THE CORRECT DOCUMENTATION IS IN PLACE PRIOR THE SERVICES BEING PROVIDED.

There are at least seven mandatory conditions that must be met, but the one that families sometimes struggle with is that, "The agreement must be in writing, and properly executed prior
to the service or assistance being provided. The agreement
cannot be applied retroactively to pay for services or assistance that was provided prior to the agreement."

The concept is, if there is the right written contract in place, an individual (a parent, for example) can pay another person (a child, for example) to provide personal care services.

Note that one of many important provisions of the Louisiana Medicaid Eligibility Manual regarding these Personal Care Agreements provides that, "A Personal Care Agreement that fails to contain any of the mandatory provisions is considered to be invalid. Payments that are not considered to be compensation in accordance with a valid written agreement are transfers without compensation."

Bottom line - this can help certain families protect assets while keeping a parent or grandparent out of the nursing home.

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Paul Rabalais
Louisiana Estate Planning Attorney
Phone: (225) 329-2450