Most adult children provide care to their elderly parents out of a sense of love and duty, rather than for pay. We would venture to say that even if mom or dad offered to compensate the child for his or her time, 99.9% of caregivers would not take the money.

However, some Portland, Oregon elder lawyers believe that to be a mistake if mom or dad is at a point where they may need to access Medicaid benefits or Veteran’s Aid and Attendance benefits to pay for long-term care services that are not covered by private health insurance or Medicare.

Both Medicaid and Veterans Aid and Attendance Benefits are “means-tested” programs. That means if a senior has too many assets or too much income, they would not be eligible for coverage. To become eligible, the senior must “spend-down” assets to a certain level. 

One way that seniors are allowed to legally “spend down” their assets (rather than give all of their money over to a nursing home), is to pay their family caregiver. To make it official, the elderly parent and the adult child providing care will enter into a “caregiver contract.”  

The caregiver contract should be carefully drafted so that there is no confusion about whether your parent simply gave you the money. That would be an ineligible transfer. However, if the money is earned in exchange for providing caregiver services, then it is acceptable.

Please consider these points when creating a caregiver contract:

-       Contact an experienced elder law attorney in Portland, Oregon to ensure that the compensation will count toward the spending down of assets. 

-       Include a detailed list of the caregiver’s responsibilities including transportation, laundry, cleaning, etc. 

-       Make sure the compensation is in line with what professional caregivers charge. 

-       The caregiver must report the compensation as income earned on their taxes. 

If you are caring for a parent – especially if that parent is likely to need increasing levels of long-term care in the near future, contact us to schedule a consultation. We would be happy to meet with you and your parents to create a long-term care plan that addresses mom or dad’s needs.

If you want to get started on your estate plan, read about our estate planning services and schedule an appointment.

To your family's health + happiness.

~Candice N. Aiston

P.S. Want to get started slowly but surely, naming guardians for your kids? Check out our Guardian Plan kit.

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Candice N. Aiston is an Legal Planning Attorney for Estates + Businesses in the Portland, Oregon area. She helps people to prepare for a lifetime of security, prosperity, and guidance. If you would like to receive her free reports, please visit http://aistonlaw.com/ to sign up. Follow her Facebook page for daily planning tips: https://www.facebook.com/aistonlaw/.