A recent article in US News & World Report states that “more than 50 million family members provide more than $300 billion a year in uncompensated care to family members.” The care is frequently provided by an adult child who has moved back into the family home to take care of mom or dad. In elder law, we call this child the “caregiver child.”
The caregiver child has often left the work force to take care of an aging parent. He or she has lost an income, and also loses health insurance, Social Security and IRA contributions, and the chance to advance in his or her prior employment. A caregiver child makes many personal sacrifices in the course of caring for a parent.
At our law firm, we always ask if an adult child is providing care for an aging parent, and raise the issue of compensation for the caregiver child. The parent will often suggest leaving an additional bequest in his or her will to the caregiver child, in recognition of the care services provided. There are several problems with this approach. With the high cost of long-term care, there is no guarantee that the parent will have any assets to pass to the caregiver child. An unequal bequest in a will can also create friction between the caregiver child and the other children, who will receive less.
The best strategy involves setting up a caregiver agreement between the ill parent and the caregiver child. The agreement details the services the child will be providing and the method of payment. The agreement serves many useful functions. First, it is evidence that the payments from parent to child are not gifts that would trigger a Medicaid waiting period. Instead, the payments are compensation for services provided, not subject to any penalty. Second, the agreement reduces friction between the caregiver child and other children, since the parent clearly states his or her intent that the care be compensated.
It is very important to establish the care agreement early in the caregiving relationship. Medicaid will normally approve a written care agreement that provides for payments concurrent with services provided, so long as the amount of payment is reasonable in relation to the service provided. Medicaid is far more suspicious of caregiver agreements that purport to pay a lump sum for past services provided, and may seek to treat these payments as gifts, subject to a transfer penalty waiting period.
In our experience, parents recognize that they are asking a lot of a child who becomes a caregiver. They want to give the child the tools to do the job well. A caregiver agreement prepared by an experienced elder law attorney can be an important part of the plan. Do you know an adult child caring for an aging parent? Or a parent receiving care, who wants to make sure a caregiver child is treated fairly? Please give him or her a copy of this article.
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Here's a true story - happened to my best friend. Her uncle lived in his own house in Vancouver, WA. His stepdaughter lived across the street. When the uncle's wife died, the stepdaughter told him she would take care of him until he died, and in exchange he would give her his house. So - that's what he did. He signed his house over to his stepdaughter, she moved in, cared for him for a year, and then lo and behold, decided she wanted to move to Texas. She put the house on the market, told stepdad - you gotta move out. The man was 90 years old! He had a small income - about $1400 a month. He applied for Medicaid so he could move to an adult family home, only to be told he was ineligible because he had "gifted" his house to a family member just a year earlier. Now, luckily this man had a wonderful niece (my friend) who was willing to take him into her home and care for him for the remaining three months of his life. Otherwise - who knows where he would have ended up. Moral of the story - DON'T give away your assets until you talk with an attorney!
ReplyDeleteI know many adult children (myself included) who are the primary caregivers for their elderly parent/s. The majority of them do not (myself included) receive any compensation for their additional role as caregiver. Those who are compensated usually talk about the conflict that exists between themselves and other family members. These conflicts usually revolve around (a) a lack of knowledge in what is involved in the caregiving role both physically and emotionally (b) other family members wanting to micromanage from a distance the caregiver and what the caregiver does for the compensation (c) and the fact, that there are times the caregiver who is being compensated has not been "successful" (the prodigal son or daughter as viewed by the family) in life, and has come home as a last resort. I only know of one caregiver that has a written agrement.
ReplyDeleteSo much of the family caregiving dynamic has to do with pre-existing family dynamics that have never been resolved and if that hasn't been tended to then the compensation becomes a real issue. I hope this helps. Mary Ann Hard
In my capacity here at Lincoln, I witness family dynamics on a daily basis. I have never heard nor has there ever been a mention of a Caregiver Agreement with families that I counsel. I can tell you that when there is an elder death there is usually a "support team" that shows up with the surviving spouse. Many times I sense that there are different agendas with many of the players.
ReplyDeleteAll of us here at Lincoln try to spread the gospel of "plan ahead" so there will be no secret agendas with family/friends as to the real final wishes of the deceased. Funerals and cemeteries are usually much more expensive than people think mainly because many people avoid thinking about it or inquire about them.
I try to advise financial planners about final expenses so they can build them into estate planning portfolios but they, like many families, are reluctant to think or act on the inevitable event that can run up to $15,000 for a traditional funeral and about $8,500 in cemetary costs.
I would be happy and be available to answer questions about the death care industry. I always scratch my head when I see "elder planning" and consistently see that there is no section or mention of the inevitable major event that will effect family when members pass on. I'm on a mission to take the mystique out of this business. Jerry Simer, Lincoln Memorial Park & Funeral Home, 503-771-1117
I've always felt that anyone who expects a family member to quit their job and move in with the parent to take care of them 24/7/365 is crazy and very selfish. Now, after working "in the field" and having both of my parents suddenly "get old" in a flash, I also feel that the individual who is willing to be caregiver for their parent is very generous, giving, kind, thoughtful, and loving, but also somewhat foolish.
ReplyDeleteI considered myself extremely lucky to be a stay home mom. During those years, I had a small business thru which I made "spending money," except for one year when I directed an international trade conference and made a great deal of money. All the while, I also did a tremendous amount of volunteering, fundraising, and project management, for the schools and churches my daughters attended. Like the caregiver child getting a good feeling of doing something right and good and kind for the aging/sick parent, I used to have a good feeling because I was giving of my time and talents, instead of money (which was, of course, limited in a one paycheck family), for the betterment of the school/students, parish/parishioners. I also thought that I was building my resume, especially with the Conference Director position, so that when my children were grown, I would be able to find a great, well-paying job to re-start my career. Boy was I wrong!
Besides not being able to find a job at the pay scale I expected, I can't find one that has career growth potential. I've been told I'm too young / too old, too dressed up, over-qualified / under-qualified, etc.. . . not really beneficial information to make changes to get that elusive job. Even more frustrating is when I see articles in newspapers and magazines that feature 50-ish women who "gave up lucrative careers to volunteer." They are put on a pedestal, given an award and oftentimes given a large grant to help them with their "project." They have a pension, insurance policies, a nest-egg, a fancy house and a new car. Truthfully, is volunteering causing them any hardship? Quite the opposite to the stay home moms who raise their own children, (and even babysit working mom's kids so those mothers didn't have to miss work on school holidays and when her kids were sick), I and many other moms, gave up decent career-track jobs with benefits. We will never recoup the job or the benefits! I am thrilled that I got to raise my own children. I am glad I didn't have to send my daughters to daycare. BUT, the disparity will continue....until being a stay home mom is valued by our society.
Now that my parents are needing more care from my siblings and I, and I work in a senior living facility, I see a great number of comparisons between my years of volunteering while focusing on my children and the years that sons and daughters care for their elderly parents.
Hopefully, adult children will read this thread and start thinking about compensating their parents' caregivers. . . . even if they ARE their siblings who "JUST" help the parents get groceries, go to the doctors, take a bath, pay the bills, file taxes, not lose Social Security, medical, or Veterans benefits, and a hundred more tasks. If nothing else, your blog will give the caregivers a way to open the conversation about being valued for the service and for _being paid_. Perhaps someday, stay-home moms can be compensated in some way too. . . . .they might qualify for the same tax benefits as does a parent who uses daycare. . . . perhaps stay home moms can get their jobs and seniority saved for them as do soldiers while they go to serve our country....I know life isn't fair, but maybe one day it will be more fair.
The agreement between the elderly and the caregiver child should be really made clear from the start. But if you're a senior and you feel like the agreement won't be at your advantage, then might as well consider staying at an Adult Family Home.
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