Contracts for the Care of Elderly Parents

In Who Will Mind Mom? Check Her Contract, Wall St. J., Sept. 7, 2006, Rachel Emma Silverman discusses contracts between parents and children or other family members for care of an elderly or disabled parent or relative.

A small but growing number of families are setting up caregiver contracts, in which adult children or other relatives are hired, for modest salaries, to take care of elderly or disabled family members. These arrangements, which are also called personal-service or personal-care agreements, can help reduce the size of a parent’s estate and thereby improve their chances of becoming eligible for long-term-care coverage under Medicaid. They can also minimize battles between siblings and other family members. For many other families, the contracts simply help reward the significant amounts of time, effort and money that family members often spend watching over and taking care of an elderly relative.

Note, however, that these types of contracts may be easily abused by the caregiver and thus must be used with caution.