Welcome! Thank you for your question.
It is great that you are thinking ahead and asking these questions. Your legality issue fall into two categories: 1. liability and tax; and 2. Future Medicaid eligibility.
First, If your niece is providing the care privately then you need to know that she would be looked at by the IRS and Workers Compensation
as an employee
. There is nothing you can do in a contract
to change the fact that she is an employee. Since she would be only working for your family there is no way to call her a contractor. It would be best if you treat her as an employee, set up a contact to pay her and withhold payroll taxes and workers compensation. To protect against your mother being liable if she gets hurt on the job you would need to increase her personal liability insurance
to protect against that risk. A million dollars should be minimum.
Second, for Medicaid the home needs to be purchased in your mother's name or in the name of her Trust. You also need to make sure that any payments for care are only done when there is a valid caregiver agreement in place. The caregiver should keep a log of hours worked and services performed on a daily basis to justify the payments received.
Here is a sample caregiver agreement. http://elder-clinic.law.wfu.edu/files/2010/11/CareAgreement.pdf
I cannot provide you with legal advise. I have provided you with information about the law related to your question. My answer, and any information that you find online, should not take the place of having a consultation with a lawyer in your area to advise you regarding your specific issues.
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