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Legal Agreements for Families and Caregivers

There are an estimated 53 million adult caregivers in the United States and nearly one in five (19%) are providing unpaid care to an adult with health or functional needs. In addition, sixty-one percent of caregivers are women and are

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Important Legal and Financial Documents for your Parent

Caregivers are usually involved in a variety of care activities, which can sometimes include managing the finances for the care recipient and making sure that all of the legal documents are in place. If you need to manage your parent’s finances, healthcare, or estate as a part of your role, there are legal documents that need to be presented to doctors and places of business to show that you have authority to make decisions on your parent’s behalf. 

Create a Caregiver Agreement. A Caregiver Agreement is a formal contract that states what care is to be provided and how much the caregiver will be compensated.  The agreement should include the date care begins, detailed description of services, schedule of services, how long the agreement is in effect, location where services will be provided, a statement that the terms of the agreement can be modified by mutual agreement (in writing) of the parties involved, and signatures by the parties and date agreement was signed. If it is possible that the person may need to apply for Medicaid, an attorney in the state the person lives should be consulted to assure the caregiver agreement satisfies the state specific requirements for Medicaid. Check out the post on the left column of this page to learn more about caregiver agreements. 

A Durable Power of Attorney is a legal document in which you are appointed to act on behalf of your parent and to manage their financial matters. If your parent becomes incapacitated, you, as the agent, will have the authority to make financial decisions on their behalf (the principal). The Durable Power of Attorney is effective until your parent dies or until they decide to revoke it. Power of Attorney law is state specific, the ABA Commission on Law and Aging has a listing of state power of attorney laws. A Power of Attorney is a very powerful document, also see the tip sheet Five Safeguards to Consider Adding to Any Power of Attorney for Finances

A Health Care Power of Attorney—or Durable Medical Power of Attorney or healthcare proxy— is a legal document used to appoint a person to make decisions on behalf of another person. If your parent is unable to make those decisions for him or herself, you as the health care proxy can make sure that health care providers follow their wishes even if a medical condition changes. Hospitals, doctors, and other health care providers must follow the healthcare proxy. Your parent may give you as little or as much authority as they want, i.e., your parent may allow you to make all health care decisions or only certain ones. 

There are numerous online sites with easy-to-fill-in forms and advice. Some require payment others are free. You will find some examples at the following:

  • Legal Zoom provides forms for customizing Wills and other legal documents.
  • CaringInfo provides free information and resources to help people make decisions about end-of-life care and services before a crisis (in English and Spanish).
  • Five Wishes is a document written in easy, clear language that meets the legal requirements for an advance directive in most states. Families also use Five Wishes to help start and guide family conversations about care in times of serious illness.

A Living Will serves as a written declaration of your parent’s health care wishes when they cannot communicate them personally. It explains their health care preferences and instructs their doctor about any end-of-life decisions. (NOTE: In some states a Living Will is not used to name a proxy. In those states, you must name your proxy in a separate Health Care Proxy.)

It is advisable to have both a Health Care Proxy and Living Will. Together, the two documents can work to make your parent’s health care wishes clear and guarantee those wishes are carried out.  

If your parent writes a Living Will, be sure:

  • Their name is clear as the person creating the Living Will.
  • The Living Will is dated.
  • The Living will contains a clear statement of their personal health care wishes.
  • Your parent has signed the document.
  • There are two witnesses who sign and date the document.
  • The witnesses make short statements that your parent signed the document willingly.
  • The Living Will notarized. (Not all states require this, but why take a chance.)

There are numerous online sites with easy-to-fill-in forms and advice. Some require payment others are free. You will find some examples at the following:

  • Legal Zoom provides forms for customizing Wills and other legal documents.
  • CaringInfo provides free information and resources to help people make decisions about end-of-life care and services before a crisis (in English and Spanish).
  • Five Wishes is a document written in easy, clear language that meets the legal requirements for an advance directive in most states. Families also use Five Wishes to help start and guide family conversations about care in times of serious illness.

Living Trust (different from a Living Will) is a legal document that allows your parent, or anyone they name as trustee, to transfer ownership or title of assets into a trust. But they keep control of those assets throughout their lifetime. A Living Trust names recipients of assets (heirs) from the trust when your parent dies. A living trust allows heirs to avoid probate, the court process by which a will is determined to be valid or invalid.  

Go to the National Academy of Elder Law Attorneys (NAELA) website to find information and a list of attorneys who specialize in elder law matters such as living trusts. 

Last Will and Testament is a legal document that gives directions about where and to whom your parent’s assets should go after you die. You may be named an “executor” to carry out your parent’s directions as stated in the will.

If your parent wants assistance in writing a will, go to the National Academy of Elder Law Attorneys (NAELA) website to find information and a list of attorneys who specialize in elder law matters such as wills. 

When caring for someone, you should know where the following documents are located, and keep them organized:  

❏ Medical records  

❏ Birth Certificate  

❏ Social Security benefit/payment information  

❏ Medicare and Medigap policy information  

❏ Insurance policies (health, life, home, auto, etc.)  

❏ Pension, 401(k) and other income related benefit statements  

❏ Bank statements  

❏ Loan agreements  

❏ Investment statements (IRAs, mutual funds, etc.)  

❏ Stock and bond certificates and statements  

❏ Mortgage papers 

 ❏ Deeds  

❏ Tax Records  

❏ Tax receipts and relevant documents needed for tax filing  

❏ State and Federal income tax returns  

❏ Vehicle titles 

Thinking Ahead Roadmap

If your parent does not need caregiving support yet, it is still helpful to talk to them about their future financial planning. This way you know how to best care for them and your parent has documents in place to support you as a caregiver. Use the Thinking Ahead Roadmap as a guide to discuss money management and any concerns they or you may have. 

Healthcare Values

You will find it helpful to discuss with your parent what their health care values are.  Values are strongly held, long term beliefs that shape our decision making.  The ABA Commission on Law and Aging recommends several tools to help your spouse develop and discuss their health care values. Find the tools here.

The Role of Fiduciary

If your parent designates you as their Health Care Proxy or Power of Attorney, you are a fiduciary. To learn more about the role and responsibilities of a fiduciary, visit the Consumer Financial Protection Bureau to view their guides on managing someone else’s money. These guides provide information on navigating fiduciary roles such as power of attorney, trustee, and more.  

Organizing Documents

AARP has developed a useful document that can be used to list records, their locations, and contact information for professionals such as accountants, clergy, etc.