Caregiving Agreement
By: Lisa Hostetler Brown, Certified Elder Law Attorney*, LawyerLisa
Expert Answer: As an elder law attorney, one of the most complex issues I help families address is caregiving — especially when a loved one steps in to provide ongoing support for an aging parent or relative. While it’s common for family members to help informally, a caregiver agreement is a valuable legal tool that can provide structure, clarity, and protection for everyone involved.
A caregiver agreement, also known as a personal care contract, is a written agreement between a person who needs care (usually a senior or someone with a disability) and the individual who provides it — often a family member. This agreement outlines the services the caregiver will provide, how often, and what compensation, if any, will be given in return.
From an estate planning perspective, caregiver agreements serve multiple important purposes.
First, they provide legal and financial transparency. Paying a family member for care without documentation can raise red flags in the context of Medicaid planning, especially if that individual later applies for long-term care benefits. Medicaid has a five-year lookback period. Large transfers of money to family members can be seen as gifts, potentially disqualifying someone from receiving benefits. A properly structured caregiver agreement helps prove that payments were legitimate compensation—not gifts—and can help avoid penalties.
Second, caregiver agreements can help prevent family conflict. By clearly outlining expectations and compensation, these agreements reduce misunderstandings among siblings and other family members who may not be involved in day-to-day care. It also affirms the value of the caregiver’s time, which is often given at great personal and financial sacrifice.
Finally, including a caregiver agreement in your estate plan can ensure your wishes are respected, both in terms of your care and your finances. It allows for planning that is proactive rather than reactive, offering peace of mind for you and your loved ones.
It’s important to note that not all caregiver agreements are created equal. A well-drafted agreement should comply with both federal and state Medicaid rules, include specific job descriptions and payment terms, and be supported by time logs or records. Consulting with an elder law attorney ensures the agreement is legally sound and aligns with your broader estate planning goals.
In summary, if a family member is providing care (or may need to provide care for you in the future), a caregiver agreement is worth discussing with an elder law attorney. Not only can it support fair compensation and legal compliance, but it also promotes harmony and preparedness as part of a comprehensive estate plan.
*Lisa is Certified by the National Elder Law Foundation.
