Using a Personal Service Contract to fix gifts made during Medicaid's 5-year look back period

Using a Personal Service Contract to fix gifts made during Medicaid's 5-year look back period.

Attorney Tom Olsen: Let's go back to Attorney Robert Hidock. Robert, you help people to protect their life savings from nursing homes. Most people simply know, "Hey, Medicaid has got a five-year look-back period. That's it. Nothing we can do." We know that there are Medicaid-compliant tools that will help people to protect their life savings, and one of those most valuable tools is a personal services contract.

Attorney Robert Hidock: Correct. Usually, we see a personal services contract when someone is paying someone in advance to take care of them. It's a Medicaid-approved tool that will allow the transfer of an asset prior to the five-year look-back period and get somebody qualified for Medicaid. In this instance, we're dealing with a family who made some gifting, rather large gifting, $100,000 in gifting, within the last year. When they went to apply for Medicaid, it would create a penalty period because it would violate Medicaid's five-year look-back period.

In this instance, we're drafting a personal service contract tailoring it to them and saying, "When I made that gift, I really meant that to be as payment for taking care of me." Her mom was in the assisted living. Her children were taking care of her. Now, we're going to go back through the hands of time and turn that gift into a payment of sort.