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Comfort Care Contracts: Medicaid Planning or Elder Fraud?

Lessons on avoiding elder fraud should start when young.  Children can get greedy when it comes to sharing with their siblings.  And that does not stop when they become adults. 

When “Medicaid Planning” for their elderly parents is thrown into the mix, the results can be disastrous.

Many if not most Medicaid Planning attorneys are not experienced litigators and often do not closely monitor what happens after the “plan” is put into place.  That can open the door to fraud and financial abuse.

Lessons on avoiding elder fraud should start when young.  Children can get greedy when it comes to sharing with their siblings.  And that does not stop when they become adults. A greedy kid sees parents’ assets as an “inheritance” to which they are entitled,

“Medicaid Planning” canbe viewed as a scam, albeit a legal one, to transfer money from aging parents to the kids.  Financially stable parents become impoverished, so that the state ends of paying nursing home costs – and the kids are assured of their “inheritance.”  Regardless of what you might think about the rights or wrongs about “Medicaid Planning”, it is a fact of life for many families.

There are limited ways to get rid of money and still be eligible for Medicaid.  This is called “Spend Down.”  One popular “Spend Down” scheme involves mom and dad entering into a contract with one of the children to provide them with “Comfort Care”, usually for an exorbitant price.  $6000 a month is not uncommon.  And for that price, the parents get: little or nothing.  Merely a vague agreement to provide care.  Even if that means putting mom and dad into a nursing home.  But since the goal is to impoverish mom and dad by transferring their money to the kids, who cares about the cost?  Right?

Wrong.  The “Care Contract” usually involves the parents and one of the local kids.  The folks at Medicaid will frown at allowing mom and dad to “spend down” $6000 a month for care to be provided by a child who lives out of town.  In our mobile society, often one of more of the kids are raising their own family in a distant location.  So the one who lives the closest is the one who takes advantage of the lucrative “Comfort Care” contract.   After two years, the local kid ends up with $144,000 of mom and dad’s money, for doing little or nothing.  And it is not uncommon for the local kid to hurry mom and dad into the nursing home by grabbing up as much in additional funds as they can, often by obtaining a power of attorney from the aging parents.

When the parents have been isolated by the local child, the risk is greatest.

As long as the entire family is on board, this can be acceptable.  But that is not always the case.  A frail mom and dad can end up in a nursing even though they thought the “Comfort Care” contract would keep them at home.  And the local kid can end up with most or all of their estate.  In many such cases, the out of state children do not even find out what happened until after mom and dad die.  Then they discover there is no estate left.  No assets to even pass under the will, so often no probate estate is opened.

The children who were left out may have a remedy.  But it will involve an expensive lawsuit filed by a litigation attorney experienced with elder financial abuse and senior citizen fraud.

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