Caretaker Agreement Not Technically Required

Caretaker agreements have been discussed in Posts 17 and 52. Basically, the regulations provide that if an applicant transfers funds to a child or relative if such transfer is pursuant to a pre-existing agreement, the presumption of a transfer is rebutted. However, careful examination of the language indicates that such agreement may not be necessary. The regulations state that a transfer of assets by the applicant to a friend or relative “may be rebutted by the presentation of credible documentary evidence preexisting the delivery of the care or services.”

The word “may” is to be stressed. My feeling is that if the fact situation clearly indicates that a transfer of monies compensating a friend or relative for past services is obvious, a pre-existing agreement should not be provided.

For example, if the applicant during the look-back period has no funds and needs medicine to keep alive, monies expended by a friend on such medicine with the check indicating that it is a loan should not require a caretaker agreement. Similarly, if a dependent relative (see Post 14) resides in the future applicant’s home, a portion of any expenditures by the dependent relative should be treated as reimbursable.

Although a caretaker agreement should be drafted, the necessity for such may be lessened, particularly if the parties are aware that the applicant will be receiving an inheritance. That is, the child or friend made expenditures on behalf of the applicant with the anticipation of a reimbursement from the applicant.

The above ideas are merely suggestions as to arguments that can be made if a caretaker agreement has been neglected. Obviously, the preparation of such agreement should be a standard course of conduct.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post 71