Millions of Americans are looking after an older family member. A survey a few years ago put the value of family care-giving at $375 billion a year. And while care-giving has traditionally been something family members do for their elders, a growing minority of these caregivers is actually paid to do the job.
Since the economic downturn began, elder law attorneys across the country have been drawing up more contracts that deal with how to care for mom or dad, and get compensated for it.
Paying for family care
David Fowler and his wife, Gloria, take care of his 94-year-old mother Mary Ruth, a retired teacher. She was widowed in the 1960s and lived on her own until a few years ago. But when her eyesight started failing, they moved her from Indianapolis into their home in Ogallala, Nebraska.
Mary Ruth is blind now but she?s still pretty self-sufficient. She climbs the stairs and dresses herself, although David and Gloria lay out her clothes. She?s started showing signs of dementia, so they make sure she takes her medication as directed.
David says it?s a joy to care for his mom and he?d do it for free, but he doesn?t. Mary Ruth pays her son $1,000 a month as part of an agreement that was initially his brother?s idea.
"At first we were kind of uncomfortable with what he was talking about because?..I don?t want to make a profit off of my mother," says David. "That?s just not in our way of thinking."
But the money is welcome. David will soon turn 70. He and Gloria both work part-time. For years they owned a photo studio in town and put everything they made back into the business.
"Well, as it turned out digital really killed the small mom-and-pop portrait studio and our business was worth maybe half of what we had anticipated when we sold it," says David.
Everyone in the family is happy with the payment arrangement. Nothing was put in writing. But elder law attorneys say families should draw up a formal personal care contract.
Lawyer Howard Krooks says it?s a way to protect the older person. There may come a time when they have to go into a nursing home, have very little money left, and should qualify for Medicaid, the government?s medical assistance program for poor Americans. But there?s a catch.
"The monies you paid to the family caregiver absent an agreement in writing will be deemed to have been gifted by you to the family caregiver," says Krooks, "causing a period of delay wherein which you will not qualify for the Medicaid benefit."
In other words, Medicaid may not pay for care for months - or even years - because it considers dollars given to a family member to be money that could have been saved to pay for nursing care. But if both parties sign a contract before the family caregiver starts the job, Medicaid accepts that as an employment agreement.
Krooks says his business in this area has doubled in the last several years. Other elder care lawyers say the same. Why are more families turning a personal relationship into a business arrangement? Krooks points to the recession. Some of his clients are adult children who were laid off and can?t find new jobs.
"They find themselves in a position of care-giving and there?s a way to really satisfy two needs: the need of the parent for the care - and the parent would have to spend a whole lot more money to hire a third party to provide similar level of services - and the need of the child to be able to earn one?s keep."
He expects the number of paid family members to keep rising even as the economy recovers, because the need for care-giving is growing as America?s population ages.
Of course, money is famous for causing family feuds. Krooks has seen arrangements fall apart because one relative hated the idea.
"They were frankly looking to have another family member provide the services in an unpaid manner," he says, "so that more money could be left in the estate and hopefully when the parent died, they would get more money."
That?s not a problem in the Fowler family. For one thing, there?s not much of an estate to leave. For another, everyone gets along - even if David does tease his mother about the family hierarchy.
"You always loved me best," he tells her.
Mary Ruth answers with a laugh. "That?s what all three of you say. But there?s no good, better or best in this family. They?re all best. At least to me."