Family Caregiver Agreement in Pennsylvania: How to Avoid Traps for the Unwary

Family Caregiver Agreement in Pennsylvania

According to a study conducted by AARP and National Alliance for Caregiving study, nearly 40 million Americans in 2014 were providing unpaid care to people who are older, disabled, or otherwise in need of assistance[i]. For those that leave jobs to care for family members, it can become a financial hardship for the family. Frequently, the family does not realize the legal intricacies involved in privately paying a family member or friend to provide care. Payments made to a family member or private caregiver who provides care can be a minefield of potential Medicaid and income tax issues.

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OWM Blog – Medicaid Asset Protection Planning: Should I gift my home to my children?

Woman with adult daughter at homeFor many people, the family home is the one asset they have planned to pass on to their children. When faced with the fear of the sky rocketing costs of long-term care in the United States, and the potential need to sell their home in order to pay for care, many ask the question: “how do I protect my house so the nursing home doesn’t take it?”

Although your primary residence is not counted when determining Medicaid eligibility in Pennsylvania, the asset is still considered “at risk” because, generally, if you received Medicaid benefits, the Department of Human Services will try to recover the value of the real estate upon your death through a process called “estate recovery.” Additionally, during your life the ongoing maintenance expenses for the real estate often become too burdensome for a single applicant to continue because of Medicaid’s income and asset limitations.

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