What is a personal services contract?
A personal services contract is a Medicaid compliant tool to protect your life savings from nursing homes.
Attorney Tom Olsen: My guest today is attorney Robert Hidock. He's an attorney here with the Olsen Law Group at Orlando. Robert, one of the more common tools that we use to help people protect their life savings from nursing homes is a personal services contract. Tell listeners how that works.
Attorney Robert Hidock: The typical is the client will have, or mom or dad will have about 50 to a couple of hundred thousand, maybe half a million dollars in the bank or in assets. We draft a personal services contract for them, whereas they cannot gift money. Their mom or dad cannot gift money. That would violate Medicaid's five-year look-back period. We create a contract that says, "Hey, me, the son, we're going to take care of my mom. She's going to pay me in advance for taking care of her." Then that is accountable, not accountable transfer of assets for Medicaid. It bypasses the five-year look-back period and it helps the person go to Medicaid quicker.
Attorney Tom Olsen: That is a great tool for moving money out of somebody's asset column as far as qualifying for Medicaid. I know that in a perfect world, let’s say we are doing this for mom, that it would say that if mom has three kids and she's got an existing will where she leaves everything equally to her three kids, hopefully, we're doing a personal services contract for each one of those. Let's say that mom had $300,000 and she's paying each one of her children, $100,000 treating them equally to what her estate plan was.
Attorney Robert Hidock: Ideally, we would draft three personal services contract, replicate the estate plan so each one of her children would get what the will says that they will get and then we carry out the estate plan. That's our goal is we want the perfect estate plan. Obviously, if there's a medical situation and Medicaid is needed, we have to be able to replicate the estate plan to preserve all the assets, to keep for their mom and dad's wishes.
Attorney Tom Olsen: Folks, we have a booklet on E on how to protect your life savings from nursing homes. If you want to get it, you can certainly call the Olsen Law Group anytime you want to. As well, you can go to our website, olsenlawgroup.com. Just scroll down on the homepage, you'll see a picture of those booklets and a little form next to it, where you simply put your name and mailing address, and we can get that out to you.
Of course, Robert Hidock is always available to you Monday through Friday nine to five, to answer your questions about protecting your life savings and getting qualified for Medicaid. Robert, like all the lawyers that the Olsen Law Group, he's got his own page. When you go to his own page, you can find little buttons there where you can call him, text him, or email him all at olsenlawgroup.com. Everybody, thanks so much for all your great calls and questions. We do so much appreciate it. If I made a suggestion for you, go outdoors and take pleasure in the beauty of nature and as always enjoy your friends and family. My name is Tom Olsen. The name of the show is Olsen on Law. You're listening to WDBO.