Caregiver Agreements: A Creative Solution to the Elder Care Dilemma
Your frail mother is still loved, but she is 92 years old and requires home care. Caring for her is a labor of love, but a difficult job; even when she smiles. In addition to the tedious and unforgiving requirements involved, the “job” of caring for her can be a huge financial strain on the child. Studies have shown that a child serving as a primary caregiver can lose 75% of potential earnings for each year that she continues the “job” of caring for her parents.
What if there was a creative solution to your elder care dilemma? Caregiver Agreements: Formal contracts under which relatives are hired to care for older family members have been around for decades, but with the current economic downturn, an increasing number of families are choosing this option. This is good news, because caregiver agreements come with a number of benefits, one of which is that money given to a son or daughter under a caregiver agreement is not considered by the government to be “a gift” when a senior is trying to qualify for Medi-Cal, Medicaid, or other public benefits. Another advantage is psychological: for an elderly parent, the idea of being cared for by a trusted relative can be especially meaningful. Contractual arrangements can also ease tensions and resentment between siblings, if, for example, one child takes over most of the care.
The caregiver agreement must be in writing and carefully crafted, preferably by an attorney who specializes in elder law. There are also tax consequences. These agreements are legal contracts; You should include details such as the cost of services with each service itemized; and the roles to be performed by the caregiver, detailed in clear language. Authorizations for medical or financial decision making should also be clearly described, especially if medical and physical decision making will be part of the duties of care; those powers must be set forth separately in durable powers of attorney for finances and advance health care directives for physicians. problems. Perhaps most importantly, the caregiver’s contract must be executed before the caregiver receives compensation. If this final provision is ignored, a caregiver agreement could lead to a crisis rather than a solution.
