Mary called because her mom is currently in a nursing facility in Florida. She wants to bring her up north to be closer to Mary. She then told me that a Florida attorney prepared a personal services contract in which Mom paid Mary a sum of $100,000 to provide her with various care services.
Her question to me was simple. “Will New Jersey Medicaid treat the money paid by parent to child as a transfer for value or will they treat it as a transfer for less than fair value?” The answer to that question is critical to her decision whether to move her mom, she told me. That’s because if the contract is not an equal value transfer it will carry a Medicaid transfer penalty.
Mary told me the Florida attorney assured her it would not pose a problem for Medicaid eligibility in Florida. She wanted to know if that was also true in New Jersey. My initial reaction was skepticism. Then I started asking a few more questions.
Mary told me she lives in New Jersey. I reviewed the contract which provides for various services such as laundry, bill paying, and assistance with activities of daily living (ADLs). I asked Mary how often she visited her mom. She told me 2 to 3 times a year for a week at a time.
She pressed me again about whether the contract “would pass muster” here in New Jersey. Next week I’ll share with you my answer.