Caring for adult children and aging parents

Modern Families – Caring For Our Aging Parents And Adult Children

The New Normal is adult children who take care of parents—and parents who take care of adult children 

Many of us travel when we can to visit family we have not seen in a while. This family may be aging parents, or grown children who have started families of their own. Some of us, however, see this family everyday—because they live with us. More and more often, families find themselves in this latter category—living with extended family, and caring for them.

A recent Wall Street Journal article titled “‘I Was Hoping to Be Retired’: The Cost of Supporting Parents and Adult Children” highlights some of the challenges these individuals face. This group is part of what is now called a “modern family.” 

Modern families have specific sets of legal needs. This article discusses the documents and forms that modern families should create so as to plan for the future, avoid disputes, and keep things running as smoothly as possible.

modern families grandfather and grandson at the beach looking for shells

What is a modern family?

A “modern family” refers to any family structure that falls outside of the traditional nuclear family structure. Few families continue to be made up of just mom, dad and 2.5 children. Instead, more than half of American families are blended, with step-siblings, aunts and uncles, older relatives, and/or adult children living in one household. A subset of these families are arranged this way to facilitate caregiving duties.

Estate planning for caregivers in the modern (or blended) family

Often, we create these kinds of modern families when we start caregiving for aging parents, for adult children with special needs, or for other family members who need help. If you are part of a combined or blended modern family living under one roof, consider some of the following documents. They will ensure that you are able to manage more for additional family residents than just the grocery list or laundry duty.

You can avoid extra stress as a caregiver when all of your family’s legal documents have been filled out.

Essential Estate Planning Documents for Blended Families: Power of Attorney, Caregiver Agreements, Wills, and Trusts

Power of Attorney (POA) in a Modern Family

POA adult children caring for older parents or relatives

If you care for an aging parent, it’s essential to ensure that both you and your parent have financial and a medical power of attorney arranged. Most older adults have the capacity for medical and financial decision-making. Yet, at an older age it’s more likely that they’ll experience medical complications that can potentially leave them incapacitated and legally unable to make decisions. 

POA parents with adult children living at home

It’s important to discuss power of attorney with your adult children over the age of 18. Adult children living at home need to have both financial and medical powers of attorney in place. Parents should consider having power of attorney for adult children. In the case of an emergency it allows them to act as their child’s agent, and provide fiscal or medical access upon certain circumstances. These documents will allow parents access to an adult child’s bank accounts and have a say in how medical decisions are made if their child becomes incapacitated.

Power of Attorney documents: Two types

There are two very different types of power of attorney. Each serves an important role to family caregivers:

Financial (Durable) Power of Attorney. If you are the caregiver in your family, you are likely the de facto manager of your parents’ or adult child’s finances. A financial power of attorney document, however, can ensure that you are able to handle any and all of their real estate, bank account, stock fund, or other estate matters. Without one, you could find yourself powerless if something of a financial nature needs urgent attention. A financial power of attorney is essential to any modern family estate plan.

Medical Power of Attorney. As a caregiver, you likely already make some health decisions on behalf of your family member. This individual might even be more vulnerable to sudden changes in physical or mental health status. A medical power of attorney is an essential health care directive ensuring there will be no question about who is empowered to make medical decisions if an emergency arises for your loved one.  (Be sure to look for other healthcare directives as well.)

Getting paid to care for aging parents while celebrating over dinner

Caregiver agreements are legal documents that lay out the terms of care and its compensation clearly in writing.

All about Caregiver Agreements

Caregiver agreements are relevant for aging-in-place or living with family or spouse who assumes the caregiver role at home. If you desire to remain at home — it’s important to have a contract that outline your desires as the “patient”. It’s purpose is to serve both parties providing clarity to the patient-caregiver relationship. If a family member assumes the caregiver role, this agreement can help keep assets within the family. 

Family caregiver legal documents can provide a number of benefits to a caregiving child and care-recipient parent (or vice-versa). These agreements can help ensure that caregivers get paid. There’s an added benefit of preventing sibling disputes over inheritances further down the road. And they can help ensure Medicaid or VA benefit qualification.

1. Get paid as caregiver for aging parents

A caregiver agreement ensures an adult child is fairly compensated for the time and energy they provide. This agreement creates a formal caregiver–patient relationship and ensures both parties are on the same page. Outline what caregiving services are desired, and if any compensation is provided and what terms by which payment will be rendered.

parent and adult caregiver child on a hammock

2. Avoid family inheritance disputes between siblings 

A caregiver agreement can prevent inheritance disagreements between siblings who feel entitled to assets because of their efforts caring for mom or dad. Figure out how much to compensate a primary caregiver sibling ahead of time can help to prevent future disputes based on who helped out more. Yet, no one wants to deal with a sibling conflict during the already stressful time of a parent’s passing.

two daughters with their senior mother

3. Use the caregiver agreement as documentation for Medicaid or VA benefits

A caregiver agreement, if properly drafted, can allow family members to seek reimbursement for caregiving under certain Medicaid programs or through Veterans Affairs (VA) benefits for at-home elder care. Some kinds of benefits available to compensate caregivers require detailed documentation to maximize reimbursements. This documentation begins with a well-written and legally sound caregiver agreement. 

woman looking at an iPhone with a doctor to learn about Medicaid

All about Wills and Trusts

These estate planning documents allow families to plan for future events. Often, the focus of this planning is to prevent burdens placed on our family. 

The difference between wills and trusts:

These are very different documents, both used in estate planning.

Wills help clarify your individual’s intentions. They can make legal estate proceedings much easier in the event of that individual’s passing. Every adult should have a will.

Trusts place a third party in control of defined assets in an individual’s estate. Trusts can help remove the burden of management for both your as the individual and for their beneficiaries.

Wills and trusts can alleviate the stress of modern family estate planning

Sidestep some of the stress on modern caregiving families by having the proper documents in place.

Avoid financial elder abuse scams with a trust

A trust allows a trusted family member to manage older adults day-to-day expenses while at the same time protecting them from elder abuse scams. 

Create a special needs trust

A certain type of trust can ensure that a child with special needs, will continue to be eligible to receive any government benefits or public assistance for which they qualify. Gifts or payments not arranged need to follow special needs trust rules and can cut into the recipient’s eligibility for benefits.

Know the value of a will

Even a simple will provides significant value. A will can allow a parent to distribute assets in a manner that recognizes the services performed by the caregiver child. Every adult living in a single shared residence is advised to have a will in place. This saves time and money in Texas to avoid probate court with an outline of asset distribution. Do the major decision making on who gets the house, and avoid probate process in Texas.

Holman Law can provide individualized estate planning documents designed for your family.

Holman Law understands that modern, blended families in Texas might need personalized forms and documents for family estate planning. We can talk through your options and draw up the documents your family needs.

FAQs About Caregiving in The Modern Family

Question: Can a parent’s child or relative’s recieve compensation as their caregiver?

Answer: Yes, it can be arranged for adult children and relatives to be compensated when caregiving for a loved one. We recommend discussing options with an estate planning attorney. At Holman Law, we can help you in three steps:

  • First, set up a caregiver agreement
  • Second, learn what state and federal programs might be able to help pay for caregiving
  • Third, ensure that a proper plan to document caregiving expenses is in place to limit questions over inheritance down the road

Question: Can a caregiver make financial decisions for elderly parents?

Answer: A caregiver can only make financial decisions on someone else’s behalf if named as joint owner on their accounts or property—or if granted financial power of attorney. Financial power of attorney can be used by a parent’s appointed agent, including a caregiver to help them make decisions for them on their behalf. 

Holman Law can help. From setting you up with a caregiver agreement to talking through the finer points of estate planning, we can help you save money and avoid trouble down the road. Contact us today for more information.

Steven C. Holman

Holman Law, Estate Planning Attorney

I love to spend time with my wife and four children and serving the Dallas Fort Worth community. I provide clients with a wealth of knowledge and experience navigating each individual’s Estate Planning needs including Trusts, Probate, Elder Care Law, and Long Term Care Planning. My law firm specializes in assisting clients with complicated legal forms and qualifying for the maximum Medicaid and Veteran (VA) benefits in Texas.

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