Taking Care of Mom and Dad When They are Elderly

By Denice A. Gierach

Most clients talk with their attorneys about what may happen to them as they become older and are unable to care for themselves.  Most express a definite desire to not have to stay in a nursing home, as they view such places to be very depressing and they want to stay in their own homes.  However, if such clients are unable to care for their own needs, they may not be able to stay in their own homes without proper assistance.  This may require the hiring of an experienced caretaker, which may not only be costly, but sometimes is not a good fit for such elders.

Sometimes the children of such elders are willing to care for their parents, even if it means that such child foregoes their employment, as many times this is a full time care position.  This is true even if the children are not qualified nursing staff.  Some children are willing to take care of their elderly parents without receiving any compensation for doing so, and perhaps such children do not need the income to live on.

Many times the parent acknowledge that this care may be needed in the future and also that they would feel comfortable having one of their children care for them in the comfort of their own homes.  The parents understand the tremendous sacrifice of time this may be for the child and so may wish to do a caregiver agreement.  This is a formal contract in which a child or other relative is hired to care for elderly family members.  The payments under these agreements are not considered gifts, which is an important consideration if the elderly person later wishes to apply for Medicaid or other governmental assistance programs, to provide for nursing home care at some point.  Instead, the payments under these agreements are considered compensation to the recipient, subject to income taxes.

These agreements provide terms about the cost and quality of the care that will be delivered to the elderly parent.  The contracts should specify the duties that are expected to be performed, i.e. making sure that medications are given, preparing and serving meals, running errands, keeping the parent’s house clean and tidy, paying bills, etc.  The compensation is based upon the average hourly rate that local agencies would charge for the service, which may be $12 to $20 per hour for personal care services to substantially more for geriatric care management services.  The agreement should stipulate how the payment will be made such as payments in regular installments, like a paycheck.  Since the compensation is taxable to the child giving the service, the contract will have to cover whether the child is considered an independent contractor, in which they have to pay the payroll taxes on the money that they receive or an employee, where the parent would have to hire a payroll service to manage the payments of payroll taxes.

If neither the parents nor children did a caregiver agreement, but the parent needs care and the child is willing to provide it, is there a way to get compensated for such assistance?  The Illinois statute allows a relative of a disabled person who takes care of the disabled person by personally living with and taking personal care of the disabled person for at least three years to file a claim against the disabled person’s estate after he or she dies.  This claim takes into account the caretaker’s lost employment opportunities, lost lifestyle opportunities and emotional distress experienced as a result of personally caring for the disabled person.  The claim also may be reduced by any financial advantage that the caretaker may received while caring for the disabled person and the factors are listed in the statute.  Depending on the person’s disability and the assets available, the potential compensation may be up to $180,000, if the disabled person is 100% disabled.

It is still a good idea for parents to plan ahead to make sure that as they age, they will be cared for in a manner that they choose.  If they don’t choose, the choice will be made for them.