With more than 40 million Americans over the age of 65, caregivers are more in demand than ever. For a wide variety of reasons, including affordability, practicality, and sense of familial duty, family members are stepping into this role in increasing numbers.
However, becoming a caregiver takes an often unseen and unacknowledged toll. In addition, to providing hands-on care to their elderly loved one, the family caregiver may need to reduce work hours or quit their job altogether. This results in a loss of not only a steady paycheck, but also potentially retirement, health, and other benefits.
In those cases where the caregiver has sacrificed all or part of their job income in order to care for an aging relative, it may be appropriate to create a formal care contract between the relative and the caregiver, and any other family members that may be affected.
These kinds of contracts can allow the aging relative to pay the family member providing care, and do so in a transparent and legal way that is designed to remove claims of undue influence or financial elder abuse.
For example, let’s say that Walter is no longer able to care for himself, and because of a medical diagnosis, he needs someone to live with him and be able to care for him in his home. He can’t afford to hire in-home assistance from an agency. If no family member is able to step in, he would have to move to a care facility. Instead, Melissa, his daughter steps up and offers to move in with him. This arrangement will force her to quit her job because the commute would be too far and her job isn’t eligible for remote work. Despite this disadvantage, Melissa and Walter agree that it’s best if she moves in. In exchange, Donald agrees to help her pay her bills and gives her a stipend each month. He also decides to leave her a greater share of his estate through his Last Will and Testament. Her brother, Sam, gets wind of this and becomes angry. He alleges that Melissa is taking advantage of their father.
In this scenario, where no agreement has been created, it could create a perfect storm for Sam to sue Melissa after Walter has passed. Even if Sam doesn’t win the case, the experience of being sued by a family member is traumatic and discouraging, to say the least.
Instead, Melissa could request that she and her father create a formal care contract, which states what is expected of her as well as how her father is helping her financially and for how much. She may want to have Sam initial that he understands the agreement. If the contract is created and witnessed by a lawyer, it would likely be considered legally binding and enforceable. If Sam, or another family member tried to sue for damages due to Melissa’s receiving financial assistance, they likely would not have a case.
Although care contracts may feel troublesome and like a lot of extra bother, these kinds of agreements go a long way to protect all parties involved, especially if there are multiple children or beneficiaries who may take an interest in how the estate is being divided.
Care giver contracts may also be used to allow for home care by a relative when there is a possibility that the elderly loved one may need to qualify for Medicaid one day.
Even if the older relative is on a limited income and doesn’t have the means to provide financial assistance to a caregiver outright, there are public programs they may be eligible to take advantage of. AARP maintains a list on their website here: https://www.aarp.org/caregiving/home-care/info-2018/help-paying-for-caregiver.html?intcmp=AE-CAR-LEG-IL and they include Medicare, Medicaid, and long-term care insurance.