One important part of a Massachusetts resident’s planning for their aging is to figure out how they will provide for their own care.
Even well before they have to enter nursing homes, people will likely need help with household chores, their financial affairs and possibly even some minor medical and personal care.
A Personal Care Agreement is a way for people in this situation to help a family member and have these important needs met.
When drafted correctly, a Personal Care Agreement will spell out how a family member will help someone with their personal and household needs. The Agreement will also set out expected hours and compensation.
In a lot of ways, a Personal Care Agreement with a family member is much like an employment contract.
In order to get the full benefits of a Personal Care Agreement, however, it is important that the one using it only agrees to pay reasonable compensation, that is, a salary consistent with what an unrelated person would expect for providing the same services.
The Agreement can include room and board as well as other expenses.
Why is a Personal Care Agreement a useful estate planning device?
Personal Care Agreements are helpful elder estate planning devices for several reasons.
For one, it sets out clear expectations between the family member providing the care and the person needing it. A detailed contract can prevent misunderstandings and family friction down the road.
A Personal Care Agreement also may help avoid misunderstandings with other family members, who are not providing care regularly.
Finally, when correctly drafted and implemented, a Personal Care Agreement may allow a Massachusetts resident to spend assets and income lawfully and still qualify for Medicaid and other benefits.