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Compensation for elder care by family member

Kingsport, TN |

My father is 92 and is living in Tennessee next door to my Sister. She cares for him and manages his financial obligations (She has primary POA for him and I am designated an alternate).

This takes a lot of time and effort especially since her husband is over 70 and not in good health either. She also runs a small business (custom tailoring wedding dresses) but the time she needs to spend caring for our father means she sometimes cannot take additional work

My brothers and sisters (10 of us) think that she should be able to take some reasonable compensation for her efforts from his assets.

Is there any legal impediment to doing this?

My brother and I have been doing this for the past two years non-stop, taking turns every other day. We stayed for 5 months 24/7 in 2008. We can't leave town, etc. even for vacations. Can we go back to 2008 and 2009 to get paid?

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Attorney answers 1


There is no legal impediment to receiving compensation from somebody for caring for them. This is called a family care agreement. You will need to claim the income on your taxes, however if you are able to write off a number of expenses you may have little or no tax liability.

It is very important that you see an elder law attorney and have him draft a family caregiver agreement for you. In fact, these agreements are great ways to protect assets for the elderly. For example, and elderly person wants to give away 20,000 as a gift to a child. However, a gift results in a penalty if the senior needs to be admitted to a nursing home within 5 years. If that money goes to a child through a family caregiver agreement then it is compensation for services instead of a gift and there is no penalty.