Put Caregiving Arrangements in Writing

When one family member becomes a caregiver for another, it's important to put in writing the terms of the arrangement. AARP estimates that more than 20 million Americans currently care for ill parents, other relatives or friends. Problems can arise if the caregiving arrangement is not clear to all involved. For example, a caregiver may be providing care without compensation, counting on an inheritance that never materializes.

A formal caregiver contract can outline the responsibilities of a caregiver, and specify the payment he will receive for services rendered and expenses, the article states. A contract ensures that the cost of care is paid at the time it is received and is not left for family members to wrangle over as part of a later division of assets.

Such a contract can also help the person receiving the care transfer assets as a way of qualifying for Medicaid. Payments for contracted services are not viewed as gifts to the care-giving relative, but reimbursement checks without a contract to support them may be.

A good caregiver contract also should:

Delineate the rights and obligations of both care-receiver and caregiver.

Be written as soon as possible, when the care-receiver is unquestionably of sound mind.

Specify what services are to be provided and at what cost. If the care-receiver is in the caregiver''s home, expenses might well include a share of those utilities, laundry, food and housing costs.

Fix the caregiver''s compensation at a reasonable rate, comparable to what an outside party would receive for the same services, and specify reimbursement for the caregiver''s out-of-pocket expenses.