Caring for an aging family member is a labor of love. It also can be a way to earn money and to bring clarity to the finances of your family's most senior generation.
Some families appoint one member to be the designated caregiver. It can be a win-win arrangement: The caregiver has steady, though usually modestly compensated, employment. The aging family member receives the care they need, and the extended family can rest easy knowing the caregiver is someone they know and trust.
Is entering into a caregiver's agreement right for you or someone in your family?
If your family decides to appoint a caregiver, it is important to draw up a formal agreement. Such agreements establish the scope of the services expected and the source and amount of compensation for the caregiver. (Most often, this money comes from the person being cared for.)
While there is usually only one person responsible for day-to-day care, each member of the immediate family must agree on that person's responsibilities. The process is generally straightforward: A relative provides for the elder’s day-to day needs, and the family, with the help of an elder law attorney, determines how much of the elder’s assets will be used to pay that caregiver.
“There are situations where one sibling expects another to take care of an elderly parent because they live outside of the state or because they don’t have time to do it,” says John Roberts, an elder law attorney from Longmeadow, Mass. “An agreement like this allows the family to determine who will take care of an elderly parent and gives that caretaker an income while they do it.”
Keep Money Matters Transparent
Having a caregiver agreement can also make it easier to track your senior loved one’s finances. Often, without an agreement, the finances of the loved one and those of the caregiver get muddled together and it becomes difficult to track who paid for what.
“These agreements make care giving more transparent,” says Linda Fodrini-Johnson, president-elect of the National Association of Geriatric Care Managers. “Just writing down how your loved one’s money will be used, by whom, for what, and specifying how much the caregiver will be paid will reduce the risk of arguments among family members.”