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Caregiver Agreements: Put it in Writing


Most care given to others is provided by family members and most of it is unpaid. According to the Centers for Disease Control, “[i]nformal or unpaid caregivers (family members or friends) are the backbone of long-term care provided in people’s homes.” Such care can come in many forms, from help with meals, rides to medical appointments, shopping, or bill paying, to more hands-on physical care including bathing, transfers and cleaning wounds.

The Need to Plan

All too often, families members fall into caregiving without a plan. They step up as needed, which may not be too great a burden when they start, but can become overwhelming as needs progress, impacting their families, relationships, work and leisure (often meaning there is no leisure.) To minimize the burden and stress, it’s important to plan, to include all relevant players — family members, care providers, financial and legal advisors — in the planning, and to update the plan as the situation changes. Those changes may be the level of care needed by the person receiving care or the other commitments of the person or people providing that care.

The CDC provides a very useful form in both English and Spanish for developing such a care plan. It can be saved and either printed out or emailed to others on the care team. Within families, it’s important to share information and plans as much as possible. Not everyone has the same ability, time or interest in pitching in. But they may be able to contribute in some way. A sibling who lives on the other side of the country, may not be able to drive a parent to medical appointments, but may be able to pay bills or do research on line.

But sharing information isn’t just about getting help, it’s also about reducing strife. While not everyone in a family can contribute equally or is willing to do so, they all have the ability to second-guess. And it’s always easy to question a course of action after the fact. There are so many times we would have taken a different course of action if we had known the outcome before setting out. While it’s usually unfair to criticize decisions made without such advance knowledge, that doesn’t stop family members from doing so. Sharing information about care needs and plan throughout the process can forestall some of that criticism. The CDC form can be a useful tool for this purpose, updating and sharing it as care needs change.

What About Getting Paid for Providing Care?

Where we’ve seen especially fraught situations is when the family care provider seeks compensation. This often occurs when the family member jumps in to provide care, sometimes moving in with the parent needing care, perhaps giving up their own apartment or house or leaving their job. This might be a sacrifice they’re happy to make on a short-term basis, but short-term can easily slides into long-term when caregiving. Then they may feel they’re entitled to compensation given the sacrifices they’ve made, especially if they’re siblings haven’t stepped up at the same level. They also may have a building sense of resentment as their sacrifice grows.

Those siblings may object, questioning the care needs, the level of care provided, whether it would have been better for the parent to move to assisted living or hire outside care. When the parent revises their estate plan to provide the caregiver with compensation in the form of a larger inheritance, siblings may challenge the plan arguing lack of capacity and undue influence. If these situations lead to litigation, everyone but the lawyers loses. Even without litigation, they can lead to resentment on all sides that can destroy family relationships.

Sometimes these situations are unavoidable. Not all siblings are going to agree on a plan or what’s fair. But the more information that’s shared, the better. Sometimes the involvement of a geriatric care manager or family mediator can help. The care manager can provide objective and informed third-party information about both the care needs of the parent and the care being provided by the family member. Mediation can provide a safe, or at least less unsafe, forum for family members to share their views and feelings.

Put it in Writing

Then whatever plan is agreed on, especially if a family member will be compensated, it should be put in writing. The agreement should also provide that it will be reviewed periodically and, if necessary, updated.

The family member receiving compensation should understand that they are earning whatever they are being paid like any other work. This means that they must report payments as taxable income and pay appropriate income and self-employment taxes.

Both the agreement and payment of taxes can be extremely useful in the event the parent needs to apply for Medicaid coverage. They demonstrate that such payments were for services rendered rather than a gift that might be treated as an uncompensated transfer for which Medicaid would impose a penalty of a period of ineligibility for benefits.

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