Caregiver Agreements: A Creative Solution to the Elder Care Dilemma

Your fragile mother is still loved, but she is 92 years old and requires home care. Taking care of 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 great financial strain on the child. Studies have shown that a child serving as the primary caregiver can lose 75% of potential income 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 Arrangements – Formal contracts whereby relatives are hired to care for elderly 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 arrangements come with a number of benefits, one of which is that money given to a son or daughter under a caregiver arrangement 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 aging parent, the idea of ​​being cared for by a trusted relative can be especially meaningful. Arrangements made 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 specializing in elder law. There are also tax consequences. These agreements are legal contracts; You must include details such as the cost of services with each itemized service; and the duties to be performed by the caregiver, detailed in clear language. Medical or financial decision-making authorizations 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 Finance and Health Care Advance Directives for Physicians. affairs. Perhaps most importantly, the caregiver’s contract must be executed before the caregiver receives compensation. If this final stipulation is ignored, a caregiver agreement could lead to a crisis rather than a solution.