What Is a Personal Service Contract?
A personal service contract outlines any personal services, as defined by the IRS, that a contractor offers to a client. Personal services rely on the contractor’s intellect and knowledge rather than capital investment or physical labor. These services fall under any of the following categories:
- Accounting
- Actuarial science
- Architecture
- Consulting
- Engineering
- Health
- Veterinary services
- Legal representation
- Performing arts
A personal services contract emphasizes how the contractor will provide their expertise to support a larger project. In addition to laying out the work expectations, this contract also offers these benefits:
- Provides clear and binding language for all contract terms
- Helps the parties navigate and settle disputes
- Establishes the governing law
- Sets the rules related to confidentiality and compensation
Because it is an independent contractor agreement, the contractor has flexibility in how they perform the personal services. They are subject to less control than an employee. This means they can use their expertise and make recommendations to help achieve the client’s goals.
Using a Personal Services Agreement in Medicaid Planning
Elder law attorneys who offer Medicaid eligibility planning can create a personal service contract to describe the terms of their services. This area relies on professional knowledge, which classifies it as a personal service. Note that it could fall outside the category if the income generated mainly comes from one of the following sources:
- Selling financial products (such as insurance or annuities)
- Investment returns or capital
- A business where equipment or products drive the revenue (instead of your expertise)
Sample Personal Service Contract
See an example of a personal service contract to get an idea of how to outline the provisions of services based on specialized knowledge. When you’re ready, you can use Legal Templates’s questionnaire to create your own personal contract. Once you complete all the questions, you’ll generate a final form that you can download as a PDF or Word file.
