Elder Law: Should We Consider A Caregiver Agreement?

It’s still Elder Law month, so we are going to talk about another Elder Law related topic. Last week we talked about elder abuse. Unfortunately, the abusers are oftentimes family members, children, and also people that the vulnerable person generally trusts.

Earlier this week, I asked the following poll question on Facebook: If you were taking care of your mom/dad, should you make them sign a personal care contract? The majority quickly said NOOOOOOOOOOOO! So, this week, we are going to discuss why you may want to consider a caregiver agreement when caring for a parent or elderly loved one. For most of us, it’s been ingrained…you MUST look out for your family. It’s completely natural for an adult child to feel responsible for the care of an elderly parent if he/she becomes physically or mentally incapable of taking care of himself. It’s also expected that the adult child will do it without monetary compensation. After all, the parent took care of the child. However, a temporary arrangement can easily turn into a long-term commitment, requiring the adult child to quit his/her job, become a full-time caregiver, or make other financial sacrifices. What then? Can the elderly parent begin compensating the child for his/her services? Give him/her a lump sum or monthly stipend to bridge the gap?

This may come as a surprise, but a caregiver agreement is an absolute must! Ideally, it should be done before providing care and receiving compensation, and certainly while the elderly parent or loved one has the capacity to contract. Now I know you may be thinking: “Why on earth would I ask my loved one to sign a caregiver agreement?” “What is a caregiver agreement anyway?” I gotcha! A caregiver agreement is a legally binding contract between the caregiver and the person receiving care. The purpose of such an agreement is to set forth the terms and conditions under which the caregiver will provide assistance in exchange for reasonable compensation. It may sound crazy to enter into such an agreement with a parent or loved one, but doing so is actually beneficial to both parties.

If there comes a time when your parent or loved one can no longer be cared for at home, and he/she has to go into a skilled nursing facility, he/she may need the assistance of government benefits programs such as Medicaid or Veteran’s Aid & Attendance Pension Benefits. Without a written caregiver agreement in place, Medicaid may treat payments made from the parent to the caregiver/child as an uncompensated transfer or gift, and impose a penalty of a certain number of months. Under the Veteran’s Aid & Attendance program, it may be very difficult to prove out of pocket expenses for long term care services. Furthermore, if any other siblings or family members are concerned about payments being made by the parent to the caregiver/child, or the type of care/assistance provided by the caregiver, a written agreement will address these concerns.

Elder Law is very complex! While a caregiver agreement sounds simple, it is not a document you should consider drafting yourself at the kitchen table. Consult an Elder Law Attorney in your state for guidance.


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