Is a verbal agreement between a mother and daughter acceptable? 12 Answers as of December 10, 2013

An elderly woman and her daughter have a legal caregiving agreement (signed and notarized in 2010) providing up to $5,000 per month for the daughter to provide care to her mother. At that time a verbal agreement was made that if the money paid monthly via check to the daughter was not cashed, the daughter could return the uncashed checks to the mother and it considered payment for the mothers half of the house (daughter owns ½ and mother ½), other real estate, and/or some stocks which are also half owned by the mother and half by the daughter. Is this a legal exchange and would it be considered acceptable for passing the Medicaid 5-year look back period?

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Law Ofices of Edwin K. Niles | Edwin K. Niles
No verbal agreement regarding real estate is enforceable.
Answer Applies to: California
Replied: 12/10/2013
Durkin Law, P.C.
Durkin Law, P.C. | Roger Durkin
Messy. No, it does not remove the property from the Medicaid 5-year look back. An irrevocable gift and creation of a life estate for you mother "might" be a better approach. Get a lawyer involved or the mess could get messier.
Answer Applies to: Massachusetts
Replied: 12/10/2013
Frederick & Frederick PLC | James P Frederick
No. All caregiver agreements MUST be in writing. Verbal agreements are not acceptable.
Answer Applies to: Michigan
Replied: 12/9/2013
James Law Group
James Law Group | Christine James
It is hard to say. It is is very complicated for a "verbal" agreement. You will have to see how aggressive Medi-Cal is, and also any paper trail (such as the $5,000 checks) would be helpful.
Answer Applies to: California
Replied: 12/9/2013
Law Office Of Victor Waid
Law Office Of Victor Waid | Victor Waid
So the real question is how to avoid the medicaid look back period and shift any potential medicaid expense to other taxpayers; is that correct? The assets of your mother are for the payment of her care, not a future inheritance for you. No, the verbal agreement will not be enforceable, as it appears to be a gift transfer to evade the payment of potential Medicaid expense.
Answer Applies to: California
Replied: 12/9/2013
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Put the agreement in writing. Verbal agreements may be binding in Oregon, but you always have the evidentiary problem of proving what the agreement was. There is no reason not to put it in writing. Verbal agreements are never preferred to written ones. Now, have you worked through the tax consequences of the payments? Are they being reported as wages?
    Answer Applies to: Oregon
    Replied: 12/9/2013
    Charles M. Schiff, Attorney at Law
    Charles M. Schiff, Attorney at Law | Charles M. Schiff
    You would be in much better position if you put your agreement in writing. It is in essence the same agreement you made in 2010 but with an alternative method of payment. You would have a much easier time explaining what you have done with your mother's estate if you put this in writing.
    Answer Applies to: Minnesota
    Replied: 12/9/2013
    James T. Weiner & Associates, P.C.
    James T. Weiner & Associates, P.C. | James T. Weiner
    That is a very technical question which I am unable to answer with the information provided. and it would have been better if daughter cashed the checks and wrote a check back which mom cashed.
    Answer Applies to: Michigan
    Replied: 12/9/2013
    Ashcraft & Ashcraft, Ltd.
    Ashcraft & Ashcraft, Ltd. | Randall C. Romei
    There are multiple issues relating to this question. Under current Medicaid rules personal services contracts with relatives are presumed to be gratuitous. In this case there is a writing that predates the current rules and a long time practice that work in favor of the agreement. Records of services rendered and other documentation about services required and competitive pricing in light of the provision of housing (room & board?) would be helpful to rebut the presumption. The use of the payments for care services to pay for the assets of the mother will require proof of payment of fair market value. Convincing evidence is required to prove fair market value was paid for the assets in order to rebut the presumption that the transfers were merely improper Medicaid planning; i.e., depleting the estate in order to qualify for Medicaid assistance. It is possible to transfer the homestead residence to the caretaker child, but in order to qualify there must be proof of residency for at least two years prior to institutionalization and the parent's need for institutional care while under the child's care, usually meaning a medical diagnosis that normally would result in institutionalized care. It also requires proof that the caretaker child actually provided the necessary care.
    Answer Applies to: Illinois
    Replied: 12/9/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    Most likely not. It would probably Medicaid rules. You should meet with an attorney to address options and the specific facts of case.
    Answer Applies to: Nevada
    Replied: 12/9/2013
    Peters Law, PLLC
    Peters Law, PLLC | Mark T. Peters, Sr.
    I don't think it will pass muster for Medicaid because it is not in writing. There is also an assumption that daughter owns half of everything. Who owned the property originally? Mom? Then this could be perceived to be a pay on death account or ownership and all ownership may be attributed to mom. You really need to talk with a local attorney that deals with this kind of problem.
    Answer Applies to: Idaho
    Replied: 12/9/2013
    Estrada Law P.C. | Michele Ungvarsky
    It seems like it would be an acceptable exchange for value under Medicaid regulations, however, I would much prefer that the mother and daughter in question exchanged checks so they would have a paper trail, not just a wink-n-nod agreement.
    Answer Applies to: New Mexico
    Replied: 12/9/2013
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