Content Overview 
- Summary
- Transfer Assets For A Reason Other Than To Be Eligible For Medicaid
- Transfer Assets
- Set Up A Supplemental Needs Or Other Trust
- Invest In Your Home Up To The Legal Limit
- Transfer Your Home And Keep A Life Estate
- Make A Payment To A Continuing Care Retirement Community
- Make A Loan
- Purchase Items That Medicaid Doesn't Count
- Create A Medicaid Trust
- Purchase An Annuity ("Medicaid Annuity")
- Reduce Equity In Your Home
- Fund A Caregiving Agreement With Family Members or Friends
- Get A Divorce
- Ask A Significant Other To Move Out
- Move Out Yourself
- Pre-Pay Funeral Costs To The Extent Permitted By State Law
Medicaid: How To Plan Ahead For Long Term Care Coverage
Fund A Caregiving Agreement With Family Members or Friends
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If you need immediate care, an alternative for reducing the amount of your assets to qualify for Medicaid without penalty is to enter into an agreement with an adult relative or friend for caregiving services.
The contract must at least include:
- A description of the services to be provided, such as transportation to medical appointments.
- The compensation.
- The length of time of the contract.
- The contract cannot provide payment for past services.
If the agreement is properly documented, payments under the contract are considered to be wages - not gifts. The person receiving the money must pay taxes on the income. When calculating your taxes, you may be able to deduct the cost as a medical deduction.
If the person is considered to be an employee instead of an independent contractor, you may have taxes to pay, forms to fill out and records to keep.
It is advisable for a lawyer familiar with the Medicaid laws in your state to draft the agreement - or at least to review it before signing.