Establishing a Personal Service Agreement in Missouri: Protecting Your Care and Assets

As we grow older, many of us rely on loved ones or close friends to assist with our daily needs. Whether it is running errands, preparing meals, or providing personal care, this help can make the difference between staying in our homes or needing to move into a care facility. While these arrangements often begin informally, it is crucial to consider formalizing such agreements through a written Personal Service Agreement (PSA). Doing so not only helps protect both parties but also ensures that the arrangement is recognized under Missouri law.

What is a Personal Service Agreement?

A Personal Service Agreement is a legal contract between an individual receiving care (the care recipient) and the person providing care (the caregiver). The contract outlines the services the caregiver will provide, the compensation for those services, and the terms of the relationship. These agreements are particularly important if the care recipient anticipates applying for Medicaid benefits, as payments made under a properly structured PSA are not considered gifts or transfers under Missouri Medicaid laws.

Why a Written Agreement Matters

Many families are tempted to enter into caregiving arrangements with a simple handshake, especially when the caregiver is a trusted friend or relative. However, informal agreements can create confusion, lead to misunderstandings, and potentially jeopardize future Medicaid eligibility. Without a written agreement, Medicaid could view payments to a caregiver as a gift, which could disqualify the care recipient from receiving benefits for a period of time.

Essential Clauses in a Personal Service Agreement

A well-drafted PSA should include the following provisions:

Scope of Services: Clearly outline the types of services to be provided, such as personal care, meal preparation, transportation, household chores, or companionship.
Compensation: Specify the hourly, weekly, or monthly rate for services. The rate must be reasonable and consistent with what an independent caregiver would receive in the community.
Term of Agreement: State whether the agreement is for a set period of time or ongoing.
Recordkeeping Requirements: Require the caregiver to maintain detailed records of the services provided, including dates and times.
Termination Clause: Detail the circumstances under which the agreement may be terminated by either party.
Remedies Clause: Address what will happen in the event of a breach of the agreement, including possible reimbursement of payments or termination of the contract.
Governing Law: Include language specifying that Missouri law governs the agreement.

Legal Considerations and Medicaid Compliance

Under Missouri law, for a PSA to be recognized for Medicaid eligibility purposes, it must be:

In writing;
Executed prior to the services being performed;
Based on fair market value compensation; and
Supported by a detailed log of services rendered.

Failing to meet these requirements could result in Medicaid treating caregiver payments as uncompensated transfers, potentially delaying eligibility for critical benefits.

Why You Need an Attorney

Crafting a PSA without legal guidance can be risky. An experienced elder law attorney can ensure the agreement complies with Missouri law, protects your interests, and aligns with your broader estate and Medicaid planning goals. Additionally, an attorney can help you navigate the often-complex intersection of family relationships and financial arrangements, reducing the likelihood of disputes down the road.

Conclusion

If you are considering entering into a caregiving arrangement with a loved one or friend, a Personal Service Agreement is an essential tool for protecting both your care and your financial well-being. Don’t leave such an important arrangement to a handshake deal. Engage the services of a qualified elder law attorney to draft a comprehensive agreement that will stand up to legal scrutiny and preserve your eligibility for public benefits. By taking these steps, you can ensure your needs are met while fostering a positive, transparent relationship with your caregiver.

For more information or to discuss creating a Personal Service Agreement, consult with a trusted elder law attorney in your community.