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(Caution: this is a complicated are of law filled with rules and exceptions. If this is your situation see an elder law attorney about a caregiver contract.)
Can a child be paid for helping an aging parent? General Michigan law and the Michigan Medicaid program presume that a child renders all services to a parent for free. That means the services are of NO legal value, unless there is a contract between the parent and child to pay for the service.
Example: Mom has died and Dad cannot live at home anymore due to dementia, it might be Alzheimer’s. The family finds that senior living communities will only take him on an “assisted living” basis. The cost is in the neighborhood of $4,000 per month. So what if the oldest daughter offers to have dad move into her home? It often happens that a child takes care of a parent for some years before the parent must go to a nursing home. Suppose she takes good care of him for years. But then he fell and broke his He has a fall and breaks his hip. He is discharged to a nursing home. He cannot return to daughter’s home. She got to the point where she can no longer take care of him 24 hours a day. They are distressed to see that she took so much better care of him than they do in the nursing home. After the Medicare skilled days are over they are shocked to learn the nursing home will charge $8,000 per month. Dad will rapidly run out of money. The family asks: “Can Dad now pay daughter for those years of excellent care?”
The surprising answer is “No.”
Unless Dad agreed to pay for daughter’s service under a contract the law will presume all service was rendered for free. If the family now tries to take payment out of his savings they could be charged with elder abuse and when they apply to Medicaid to pay the nursing home, Medicaid will be denied due to the “divestment” of money.
Under general Michigan law the presumption of gratuitous service may be rebutted by proof of an agreement to pay. If it is not in writing it can be oral but proof of that may be difficult with a key party in a nursing home with advanced dementia. Michigan Medicaid requires additional steps including a doctor’s finding that the services are necessary to keep him out of a nursing home. The program also has other requirements and limitations that are discussed separately.
Under general Michigan law there is a limited exception to the rule of “no contract, no pay” and that is the theory of “quantum meruit.” Where the proof can be made that a person received a product or service that was of significant commercial value and where the receipt implied, but did not prove, an understanding that there should be payment then the law will make the party pay the fair commercial value for the product or service. In Michigan “quantum meruit” has been applied to family situations. A lawyer is needed to prosecute a claim under this theory. However, the Michigan Medicaid program does not recognize “quantum meruit” as a valid reason for payment and if such claim were to be made it would likely be resolved in court on an appeal of a denial of Medicaid.
In a second video I explain what Michigan Medicaid requires of contracts for family care.
Got a question, give us a call! 248-356-3500,
Jim