My aunt lives with me and I do basic things like making meals, taking her to dr. appointments and all her banking (I am POA and on her account), and shopping. For a couple years we have had an agreement on monthly expense sharing - she pays me back for her groceries, she pays half of certain utilities, etc. There is no "rent" but it comes out to roughly the same each month.
I didn't really think about Medicaid lookback implications but now that my state (NY) is going to do a 30 month lookback for home Medicaid services which she may need in 1-2 years, I feel like I haven't done enough documentation and also I have basic questions...
1) Do I need a personal care agreement even if she isn't paying me for any work? (Should I just be clarifying the terms of what she is paying for since she doesn't pay rent?). I know you can't extend it retroactively, hopefully they would examine her bank records and see it's the same amount being taken out and that it corresponds with the agreement? Does a lawyer have to do this or do I just have to have it notarized. (I do ALL her shopping with my credit card, it's a pain in the ass to separate our stuff in the store so I just mark it on the receipts that I have saved...)
2) She has a derelict car in our driveway that is a piece of junk and really not worth anything, but if she donates it to charity (or sells it and gets less than book value), how to avoid having this flagged as "gift" that violates lookback? On book value the car is worth $3000 but in reality it's a rotting POS needing more work than book value, that hasn't been driven for 4 years and she doesn't have the money to fix it and also she doesn't drive anyway. What to do?
3) Normally she does not contribute to any household maintenance or renovations (that's my job). However, the sink she uses upstairs is in terrible shape, we both want to have it replaced but she would like a nicer sink than what I can afford. She has offered to pay 1/3 of the cost. It seems that her giving me that money would trigger a lookback problem so I said no. If she paid for the whole cost with her own check, would that be a problem (and then I could reimburse her)?
Note: we are in NY where Medicaid asset limits are pretty high, so yes she would probably qualify for Medicaid no matter what (she isn't near the limit). I know eventually she will probably have to go into a PACE program or Medicaid waiver home arrangement and I don't want to cause any difficulty with lookback.
To clarify, I have kept meticulous records of every penny she’s spent. She’s presented with an itemized invoice every month. I do save the receipts. What I don’t have is a written agreement (of what she’s agreed to pay for 100% or 50% etc) it’s all food, utilities, cable and so forth. As homeowner I am very careful to keep stuff like property taxes, maintenance etc separate.
She’s family so I didn’t think I was “taking her in” - like she was a stranger who was a tenant or something - that is probably why people don’t think of it in terms of an agreement.
However I probably should get an agreement in place before too much more time has passed.
Yes, the legal agreement is important to protect both YOU and her. For instance, asking rental means incomes and you having to pay taxes on it. But "shared living costs" written into a legal contract means no income no taxes for you, and a clear deliniation of what she is PAYING, and not GIFTING.
You may, with the help of an attorney, pass muster with the excuse of not understanding and having done all you can for records, but at this point maybe this is attorney work, and can no longer be DIY.
Do make an appt. That will be paid for out of her funds and that record will easily pass "muster.
You are writing here for the input and guesses and advice of just simple lay people out here. So know that your best answer to legal questions will come from legal minds. As you point out, the many opinions of "the man on the street" isn't always much more than added confusion.
We wish you the very best of luck.
We never know when the rules will change or more documentation may be needed.
As you said her deductions come out each month about the same and you do have receipts.
It is good to keep up with all expenditures so there are no disputes later regardless of who with.
Perhaps someone will post how to document the condition of the car and regarding rental contracts etc.
IF you take in a person you MUST have a care contract drawn up by an attorney and you MUST keep meticulous records especially if you are POA of every single penny into and out of accounts.
What you have done will look like, may look like, not shared living expenses, but like gifting and it is the excuse that Medicaid needs to refuse application.
There is no other answer for it now but to see an attorney RIGHT AWAY. Elder law. And yes, that is paid for out of her expenses and is the expert help that any good POA document allows for.
YIKES. I wish you the best of luck and hope you will update us after you see an attorney.