Anyone serving as a caregiver for an aging relative knows that it’s hard work no matter how much you love the person to whom you are providing care and service, and in many cases it can be a severe financial hardship as well. Studies have shown that the child who serves as the primary caregiver for aging parents can lose over $500,000 over a lifetime in reduced salary and retirement benefits!
What many caregivers (and recipients) do not know is that you can care for the one you love AND avoid sacrificing your financial well-being by executing a caregiver agreement. Caregiver agreements are nothing new, but according to this article in the Wall Street Journal “we expect the deteriorating economy to lead to a spike in caregiver agreement work.” This is good news, because caregiver agreements come with a number of benefits, not the least 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 an elderly person is trying to qualify for Medi-Cal, Medicaid, or other public benefits. However, the agreement must be in writing. It may also reduce resentment among siblings where, for example, one is rendering “all of the care” for mom.
Executing a caregiver agreement can be a HUGE benefit to your family, but you must make sure it’s done correctly. These agreements are legal contracts, and should include details such as the cost of services, the duties the caregiver will be performing. There should also be in place a medical and/or financial power of attorney, if making decisions will be part of the caregiving duties.
And all contracts must, must, must be executed in advance of receiving compensation. “You can’t do the contract after the fact and say this $100,000 was for looking after mom.”
If you would like more information about caregiver agreements, please contact our office. Whether you are the care provider or recipient, we can help make the caregiving process a little bit easier on you and your family.