principal1st Asked September 2012

Should a child of an elderly person charge them for care?


I am a finanacial planner and was brought in to evaluate the following situation...elderly woman living in her home with her grown son, son's friend and her grandson all living with her. The son's friend is the elderly woman's caretaker preparing meals, assisting with her toileting (includes diapering) and bathing etc and being paid $2900/month. None of them pay rent and they only pay for internet service and "overages" on any of the household utilities (expenses that increased since they all 3 moved in). I'm looking for comments as to the "fairness" of this arrangement as some other family members think that the hired help isn't payig their fair share. Any thoughts?

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jeannegibbs Sep 2012
I think that there are at least 3 issues here.
1) should the friend be paid for caregiving
2) should the trio pay rent
3) what about respite care

1 -- Pay the caregiver? I say yes! And preparing meals, toileting, diapering, bathing, and being available as a companion and helper are defintiely caregiving tasks! Does Friend also do light housekeeping, laundry, grocery shopping? I'd say that $2900/mo plus room and board is on the low side of the range, but you can do some checking in your specific area. If you had to bring in a live-in caregiver for your grandmother, what would it cost you?

Why should the Friend get paid? Because she is doing the work! What is more fair than that? If Mother isn't paying for her own care, what is that money used for? Probably to increase the amount each heir gets. Why should one person do an enormously hard job for free in order to subsidize the inheritance of those who do none of the work?

2. Should they pay rent? Well, not the caregiver -- room and board is part of the pay of a live-in caregiver. Does the son (and/or grandson) do household maintenance -- mow, clean the gutters, fix leaky faucets, shovel, rake, change the filter on the furnace, etc.? If so, the value of those services should be determined in your area. What would it cost Mother to get these things done if Son didn't live with her and do them?

Then try to determine what cost Son and Grandson would pay in rent for comparable living arrangements.

With those two numbers in mind, you should be able to come up with a "fair" rental amount. (My son lives with me. Having paid handyman prices for household maintenance tasks I am thrilled to have him available. I do not charge him rent.)

So, maybe after your research you determine that it is "fair" to pay Friend $3800/mo plus room and board, and that Son should pay $800/mo plus household maintenance tasks for his and Grandson's room.

If Mother is still competent to make her own decisions, the primary question is, is this acceptable to her? If she is not competent, is it acceptable to the person with POA? That is really what matters. But secondarily, do family members understand how "fair" numbers were reached?

Sometimes when family members object to paying for caregiving/home maintenance services, they do so out of concern that Mom's money won't last her the rest of her life. But very often the objections stem from seeing the inheritance dwindling away. It is not fair that one family member sacrifice so that all the others get a free ride, in my opinion.

3. Respite. No one can provide 24/7 care without breaks and remain sane. Some advance arrangements need to be made for covering periods when Son and Friend are taking some time off. This needs to be put into the plan!

It would be interesting to hear what you advise your client!
Helpful Answer (23)

JessieBelle Sep 2012
I agree. We often undervalue the work of the caregiver. If the three are paying for internet services and overages, they are pretty much staying there at no cost to the woman. You didn't mention who bought the food, so I will assume they share in that cost, too. The value of the rent in an area such as I live would be worth $600-1000 for the part house (depending on its quality). So you are asking if $2900 plus that is too much to pay someone who is on call 24/7. Since the woman requires help with toileting and diapers, I'll assume the attendees also clean the house and such things. It sounds to me that she is getting a very fair bargain.

Now should a child charge their parent? That is between the parent and child. A question you could ask that may bring clarity is: should a person not pay someone who works full time for them? Most family caregivers are not paid. The rest of my feelings on this are like jeannegibbs wrote. I guess we should ask ourselves why parents often expect their children to work 24/7 for free so they can keep their estate healthy for others. Never has made sense to me.
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I agree wholeheartedly with jeannegibbs and jessiebelle. Since I've been my mom's sole caregiver, 24/7 for 10 years (she has MANY health issues that require me to do everything here), mom and her lawyer signed this house over to me as payment for my services, with the stipulation that mom be able to live here the rest of her life. My 3 sisters are fuming about this since they will be out of an inheritance. They do nothing to help. They do not take mom for a day, week, whatever so that I may have respite. Mom's attorney was quite specific about what it would otherwise cost mom to have someone do my job (should be jobs, plural). Over these 10 years mom's costs to other people would have far exceeded the value of this house. Another issue: my being the caregiver here has caused me to drop my own business, which was successful. I am losing my own career and that also counts for something. When Mom eventually passes, I would be without a place to live otherwise. For us, this has turned out to be the only fair option.
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Whitney Sep 2012
I would say a lot depends on if the son's friend is doing a good job caretaking, if he is reliable, kind, considerate, etc. If he is a good worker, he could be worth every penny, as I am assuming he is basically on call 24/7.
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mar559 Sep 2012
My 93 year old mother lives with me in my house. My 54 year old daughter (school teacher) and I lived together before my mom moved in but now she lives in my mom's house as sort of a "care taker". My mom harbors the hope she may some day move back (not going to happen) and is not ready to sell her house. My daughter contributed a lot financially to the household expenses and groceries. Now, I add up what the utilities, groceries (less my personal items), her personal items if they are not with the groceries and her medicine which is mail ordered on my credit card. She reimburses me for these costs each month. I am actually trying to preserve her "nest egg" for the time that she will have to go into a nursing home. Right now she can walk (barely) with a walker but if she gets to the point where she can't walk, that will be the time. A nursing home in our area is $5,000.00 a month for just the basics. Doesn't include TV, phone, etc. So every month she is with me, I figure I've saved her around $4,500.00 for future needs. Although she is 93, longevity is in her family. One sister lived to 98 and one to 103.
I think I could justify this arrangement because of the increased laundry, (water bill and electric billl) warmer house, (gas bill) and grocery bill (cooking more). Since I am 72 and also on social security, I could not afford this arrangement without her help.
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moonlily1 Sep 2012
In being a caregiver myself putting in 24 hrs a day with little to no help as long as they are doing a good job in caring for her I would say yes that is fair. Nursing Facility is my area and that is the ones that aren't even that good are getting 5000 to 7000 a month. That isn't even counting the meds. When you are sole caregiver you give up everything. You have no way to hold down a job because you can't leave home. You have no life, no friends and are a virtual prisoner in the home.I think it is fair.
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195Austin Sep 2012
I think the answers above are right on the money and would not add anything else-I assume the caretakers in the friend of the son and maybe the mother of the child but if not that does not really matter much. I would like to know what you have given as an answer to your client and what the outcome was - can only say it is very hard to get a good caregiver either through an agency or privetly so that should be taken into consideration.
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Catjohn22 Sep 2012
I have to also weigh in on the side of paying the caregiver, as long as the person being cared for is having her needs met and it is not simply an opportunistic situation for her son and her son's friend. As someone has already commented, too often the work done by caregivers tend to be minimized and devalued if the caregiver is a family member. This is not helpful for anyone. The most important thing to consider in a scenario such as this is the quality of care being provided. If the needs of the person being cared for are being met, then being in their own home, and on her own schedule is probably going to be more beneficial than being moved to a nursing home or relying on paid people from the outside coming into her home to provide her care. In either of those other scenarios, the person would need to pay for her care, if she could afford it. If she can afford it, then remaining in her home, with its familiarity and comfort, and maintaining a schedule with which she is comfortable, as far as meals, sleep and other activities, is probably best for her. If she can't doesn't have funds to pay for care, then it doesn't seem that there would be any financial benefit to the relative and his friend, and if they were doing this on a voluntary, unpaid basis, but benefiting from unpaid rent, then that's little compensation for them anyway. I would repeat and emphasize that the important consideration here is the level of the mother's care and whether her needs are being met and her comfort being put before theirs. I also don't know what the role of a financial planner is in this whole thing. If there is suspicion that the mother is being taken advantage of, then the local authorities who handle elder abuse (whether that's phsyicak, emotional or financial) should be called in to handle this. The involvement of a financial planner sounds rather fishy to me. Far too often situations like this bring out the worst in family members who feel that funds that would eventually go to them are being spent on the person's care. They are the person's funds, and they should be spent in the best interest of that person, however that works out. No one should be expected to provide unpaid end of life care, with all that entails, in exchange for room and board. It doesn't equate.
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Ruggles Sep 2012
Sounds like a wonderful arrangement to me.
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RIZsmith Sep 2012
I've been caring for my mom in my home full time for about 6 years. She is only on social security so she doesn't have the funds to contribute to expenses or pay for care. Her dementia is such that I having been looking into moving her into a facility. I'm finding that the cost ranges from $3000-9000 per month at the places I've checked. So I think I'd the woman has the money, anything under the $3000 is more than appropriate. If she wasn't getting the help she's getting, she probably wouldn't be able to stay in her own home. Is she unhappy with her care? Does she have the funds? Does she want to remain in her home? If it's a yes to those questions, yes, I think it's fair.
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