Aging Baby Boomer Generation
Is There a Family Care Giver Contract in Your Future?

Studies show that family caregivers loose 75% of their earning potential for every year that the caregiver provides care for the aging senior in their life. In fact, over 50 million family members are providing what equates to over $300 billion dollars of unpaid care to a family member. Baby boomers are in fact, struggling with the costs of providing long term care. The children of boomers will face this situation as well.


The aging baby boomer generation has decided to get creative and develop a win-win solution for all involved. The family care giver contract is not new, but new rules and regulations about the “spend down” period to qualify for Medicaid has generated an increase interest in written agreements. With stricter regulations to qualify for Medicaid or other services, the “look back” period has been increased to five years. It is presently being proposed to go back 7 years.

This “look back” period investigates assets for a period of 5 (to 7years). The government evaluates if in that 5 (to 7 year period) a home(s) or other financial assets were given to family members as a gift. These “gifts” could (and often are) considered assets that were available for the aging senior to pay for care in a nursing home. The Medicaid system will take all these factors into account and determine when the aging senior will be eligible to qualify for Medicaid and other public services.

For example, an aging mother, presently living in her own home requires an increase in level of care. Her assets are her home (assessed at $300,000) and a small savings. This mother takes pride in the fact that she has this home and has every intention of leaving her home to her children as their inheritance. In fact, to preserve the home and provide care for her mother, her daughter and grandchildren have moved in to help.


The following is important information for the baby boomer generation:

According to the “look back” system, the home would be considered an asset that belonged to the mother and could pay for her care. If the home is valued at $300, 000 and care in the nursing home is $5,000 a month, it would be 60 months until the aging mother would qualify for Medicaid. In order to pay for the care in a nursing home, it would be expected that the family pay for 60 months of private pay. The finances from the sale of the house would be used to pay for care needed in an institutional setting.

The family care giver contract can change that dynamic and is a solution for the family care giver. Many family members become upset and insulted at the thought of writing up a contract to get paid to care for a family member. For some, it makes perfect sense, as they feel the financial crunch of caring for an aging senior at home.

Presently, a family member receiving payment for services is not viewed by the system as receiving a gift. Therefore, as part of a family care giver contract, the assets appear to be less and the aging mother will not be penalized.


There are many benefits, as well as a downside to the family care giver contract the baby boomer generation will need to consider

I will address them here:

The major downside to receiving payment for services is the payment will be required to be claimed as income and will be taxed. For some, this is enough to not want to provide services. For others, to provide care may only be possible if there is some financial reimbursement.

Many aging seniors do not want to have care provided to them by strangers. Some family members find it difficult to find outside care givers to provide care. In an effort to meet family obligations, family caregivers make major sacrifices to make sure that the needs of the aging seniors in their life are taken care of properly.


The benefits of a family care giver contract are many. There is the satisfaction of helping a family member in need. Many aging seniors do not want and are uncomfortable with unfamiliar faces providing their care. It can be a time to get to know the aging senior on a different level. For the aging senior, being cared for by a trusted family member can be meaningful, even if they are unable to verbalize those feelings.

For some family members, it is important to be acknowledged and reimbursed for the care they provide. It is not always easy to provide care to an aging senior that is demanding and unappreciative. The responsibilities of being a caregiver are stressful and unpredictable.

The family care giving contract can alleviate resentment and sibling rivalry. A major issue of most care givers is lack of family support; whether from siblings or extended family. This causes resentment and frustration and eventually anger on the part of many care givers. A written contract alleviates that situation, as individuals will get reimbursed for the care they provide.

It is also important that many care givers have a formalized written contract, as many family members will question and pursue legal avenues for their part of any inheritance after the aging senior passes. It is not unusual for the uninvolved family members to want a share of an estate. Providing services with a written contract can protect the caregiver that provided the majority of care to the aging senior.

Click here to go to Aging Baby Boomers and Inheritance Steps to Implement a Family Care Giver Contract

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