Both of my parents have dementia and live at home and want to remail at home as long as possible. I have power of attorney for both. A sitte...

Question

Both of my parents have dementia and live at home and want to remail at home as long as possible. I have power of attorney for both. A sitter has come highly recommended by sevral church friends that have used her in the past and she is a perfect fit for my parents but she works on her own and wants to be paid in cash. What is the best way to write a check for cash to pay her out of my parents bank accounts so it will not be questioned later? Do I write it to the order of CASH? Do I write it to the order of the banks name? Do I have the sitter sign a receipt book?

Answer

I would not advise paying in cash. Checks should be used and a 1099 should be issued at year's end to the sitter. Payment in cash is sometimes a request among sitters and therefore may not appear to count as income and self employment taxes. If your parents require Medicaid assistance for nursing home care in the future (within 60 months), such checks from their account(s) when no 1099 is issued will appear to Medicaid as gifts and will incur a penalty. Contact a local attorney that specializes in elder law for further consultation and clarification.