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A Caregiver Agreement is a state-specific, legal contract in which a family member, or any caretaker, is paid to care for another member of the family – or any person needing care – in their own home.

Caregiver Agreements need to be extensively documented and must stand up as arm’s length contracts. Family members involved in the process need to be sensitive to how the arrangements might affect relationships among other family members.

A sound Caregiver Agreement carefully defines the care needs. Do a realistic assessment of the person to be cared for. Find out the physician’s opinion of whether the needs can realistically be met in a home-based setting. In most cases, this is a resounding “yes.” The family needs to lay out very clearly the duties and responsibilities of the primary caretaker, This solidifies the appropriateness of the agreement for tax and Medicaid-eligibility purposes- please refer to your local State Health and Human Services Department for further information on Medicaid eligibility and use of Caregiver Agreements to meet requirements of Medicaid, should this be applicable to you.

Some other important matters to consider in creating a Caregiver Agreement:

  • The tax consequences will need to be discussed and explored by both the caretaker and the person being cared for and paying for the care.
  • Applicable state laws need to be researched and considered. It is highly advisable that an attorney draft the document, as they can be inherently complex agreements.
  • If a Caregiver Agreement is to aid in Medicaid eligibility, the parties need to verify with their State offices that entering into a Caregiver Agreement will not hinder or result in a loss of Medicaid, state specific medical benefits, or any other benefits.
  • It is highly advisable that a Caregiver Agreement be part of an overall and comprehensive estate plan.
  • The person receiving the care needs to be of sound mind at the time of drafting and execution, otherwise applicable powers of attorney or a guardian will need to be consulted and sign the agreement.
  • A Caregiver Agreement must be in writing, executed before the caregiver receives any compensation.
  • The care/services to be provided by a caregiver must directly benefit the care recipient.
  • It is highly advisable that a careful log of duties performed and copies of all checks paid to the caregiver is kept.

To create a Caregiver Agreement you need to answer detailed questions about the types of care to be provided, when they will be provided, and how often. The contract also addresses issues of financial compensation and other caretakers who may provide care in the primary caretaker’s absence.

To view an example of a Caregiver Agreement, CLICK HERE. Please note: The sample provided is the Caregiver Agreement document for the state of Minnesota only. IT DOES NOT APPLY TO ANY OTHER STATE. This sample is being provided as a reference only. It can allow you and others to see the components of a typical Caregiver Agreement. This sample may also be used as a starting point with an Eldercare Attorney or other legal professional should you wish to create a Caregiver Agreement of your own or for a family member. We STRONGLY recommend that you take this sample to an Attorney who can discuss with you the appropriate form for your area.

Or, you may also wish to contact a Professional Care Manager (PCM) in your area for consultation on the appropriateness and/or necessity of a Caregiver Agreement for your situation. To learn more about PCM's and to locate a PCM in your area, CLICK HERE.

Caregiver Agreement Information